If they open their windows it would be 80 degrees - do dogs NEED AC in a dwelling with open windows?

yep at least u can get roommate/lodger income by sharing part of ur single family house; still be wary that renting a finished basement for dwelling use that isn't listed on the property's certificate of occupancy as a bedroom/dwelling would still be a can of worms; some residential c of o's are for storage not dwelling, ie a c of o for a garage.

I'm not so sure city/county care as much as you think.There was a case recently in the press, where an un-permitted dwelling in a townhouse in San Francisco had been occupied for years.

I highly doubt you'll be allowed to rent it as a dwelling, and i'm assuming you weren't even going this route anyway.You also most definitely want a very well structured lease agreement.Imagine going to sell your property and you have a tenant that won't leave and you don't have a lease agreement in place.

Please contact staff at 408 975 4480 if you have questions Rental housing developments exempted from the ordinance include single-family dwellings, duplexes, condominiums, hotels, boarding houses, which are rented to transient guests for periods of less than 30 days, nonprofit homes for the aged, school dormitories, rental units owned and operated by any government agency, and any new rental units first rented after September 7, 1979.

@Chan S. my lease reads like this for early termination: Resident may terminate this agreement by doing all of the following: a) Giving Management sixty (60) days written notice, b) Paying all monies due through date of termination, c) Paying an amount equal to the Security Deposit as an Early Termination Fee, d) Returning dwelling in a clean, ready-to-rent condition, and e) Paying a pro-rated portion of expenses for repainting and cleaning based on the ratio of the number of months then remaining in the initial term to the number of months originally in the initial term.  

They compare the air quality inside the dwelling to the air quality outside.

Landlord is not obligated to provide Tenant notice that the dwelling unit has been re-rented.

You take on more liability exposure driving your car than you do with a single family dwelling being rented!

They aren't on the lease, but they are certainly "dwelling" there.