I understand that we'll build our wealth slower, but increased cash-flow has replaced (and then some) my income and enabled me to stay home with our kids and for now that is our "why."

I would also think that once you have an established portfolio you can start increasing that wiggle room.

Tried finding information on the City's website to back up her claims - considering we live right off of that road next to St Francis University this could either hurt us or help increase our property values.

This will decrease my cashflow but increase my cash on cash return.

I could see that number increasing significantly but only time will tell. 

They just guaranteed that many tenants will get an annual 10% increase instead of the 0-3% increase that good tenants probably would have had. 

Little increases will help build trust and a relationship.

I have done so in the past myself but obviously had seller accept a larger discount due to the increased risk of default.

But here's the rub, will the rent increase over time work out to positive ROI in the above scenario? 

This couple has rented it for nearly a decade and it seems that there hasn't been an increase in the rent since they started renting.