I don't know how long you have owned it but I am willing to bet if you have owned it for at least a few years you probably have a rate on that property that will be hard to get again. 

Hence if the lease clearly has terms against this and section 8 is supporting the rent, that is your best bet to ensure the tenant complies with the lease.

We have a development coming up for approval with the county adding over 100 units bordering our small town and you can bet everyone that lives in our town is upset about it. in the end though, the planning commissions in our area tend to follow the letter of the law so to speak, so if there is nothing in ordinance barring it, they will approve, generally.

I bet you would. 

I remember once I was in a nice area of ATL at a closing and the attornies office was hot I asked whats up he said his two condenser got stolen that night LOL.. its a very active sport out East of the rockies we just dont hear of this on the west coast..

Just like doubling down on a bet you could lose it all. 

Bought it as a safe bet thinking it would do roughly $35k annually in short term rents.

Hahaha I'd bet anyone under 40 doesn't even know what that is :D OK.

This options seems to be your best bet considering all other factors.

Your best bet is in the midwest or southeast.