There also seems to be government investment in revitalization of the neighborhood.  

Yet, on the same token, since there isn't any guidance from the FTB, you may be able to convince an FTB agent that your structure is within the bounds of the regulations.  

As part of the application, there needs to be an entire "narrative" about my intentions with the property, addressing dozens of regulations and other points of interest, site drawings, signs on the property, and even attending a public hearing about my proposal.

AirBnB is also a great idea, although it makes me a little nervous as a long term business model because you never know what your local city or county will do in the future as far as regulating them. 

The private investment space for non-accredited investors is traditionally governed through Regulation D as Ryan suggested, more specifically a 506b(b) private placement offering. 

Even with my tenants on Section 8 being great people, there are so many strings that come along with it, and particularly all you have to go through if you need to evict, that the guaranteed government rent check just is not worth it to me.On a positive, my tenants have found a new place and are expecting to relocate in a couple weeks, so we'll see how it goes!

The government?

Contact the local government and find out the rules and regulations for short term/ vacation rentals.

You should probably add a line indicating the portion of rent the government/welfare office pays.Welfare tenants are generally on the lower end of the intelligence quotient,not particularly bright, and will likely only understand the portion of rent they actually pay.

There may be some exceptions for government funds for low level income.