However hard to speculate without undersanding more about the property, proposed construction, timeline etc.   

Make sure the zoning change proposal makes sense beyond your personal interest.

Who knows what could be coming next in terms of legislations.

In the H.R. 3936, Built in America Act, it was proposed to extend the 100% bonus depreciation until January 1, 2027.

It's less likely (in my opinion) that governments will pass broad, sweeping legislation against STR's in an area that they've already established a robust process for how someone can do it legally.

@Kenya Williams, to be clear BRRRR stands for:BuyRenovate/RehabRent RefinanceRepeatSo what you are proposing is not a BRRRR, by definition.  

Also especially for DSCR they will want a family strong appraisal and comps, but some lenders can also utilize proposed DSCR income to qualify. 

If now Im using my Transunion Service, using Fico version 8, and someone gives me an Experian report with FICO version AutoScore 4, then comparing the 2 is meaningless.Though Im sure legislators writing these laws have very little idea you could have 48 different potential scores that are all still FICO scores. 

Many lenders will even utilize proposed or STR income to qualify. 

The owner of that property in question cannot restore his full VA entitlement until such time as the VA loan is paid off in full.Further, even if you gave him the 3.5% down on FHA, his DTI will still be hit with the payment on that VA loan, almost certainly killing his next home purchase before it even gets going.And if he gives up on homeownership, all the future potential landlords are going to see that mortgage on his credit, and likely consider him unqualified for the rental unit.Unless someone is going to write a check to pay that VA loan off in full, this is a predatory activity and the victim is the owner of the home in question, given his goals and the proposal on the table.Do the right thing.