I made every attempt to insulate them from us by adding r38 in their floor joist and using resilient channels before the 5/8" drywall was put up on my ceiling.

No insulation that I am aware of.

Insulation and ventilation is the other answer,  however these solutions can be very difficult and expensive.  

We replaced rotted wood panels on the exterior, painted the inside, re-insulated the attic, and other minor repairs. 

For example, if I can run water/sewer and electricity out there, insulate the walls, add some windows, drywall, finishes, and appliances for $30k-$50k, that's less than any unit you could buy anywhere in Portland.  

Also when we were rewiring the electrical, when taking down the sheetrock we noticed that some of the exterior walls were not insulated (live in upstate NY, folks must have been freezing) So those were the unforeseen costs.

[Captain Obvious moment]: Regardless if you go with an on-demand or a storage tank for DHW, insulating your lines makes a huge difference.  

Some things I left off: Windows: 700-2,500/unit Insulation: 3-6/board ft.

(Assuming that they put rigid insulation boards down under the rubber roof, as opposed to taking down the ceiling of all of the upstairs apartments, installing R20 insulation between the ceiling joists, and then reinstalling drywall, texture and paint.

The inside is not finished but it is insulated and vapor barriered, along with completed wiring.