So I told the seller, I got a bad vibe from this, sounds like this lady is going to live to a hundred, and rent control laws, as well as laws protecting tenants over 62 here in NYC make it impossible to get rid of her.

Depending on density and price of course!!

Live in the 1 unit while renting the others.

You're depending on one person's opinion of the value of your property.

I am asking because the below-grade basement is not counted toward living space in Kentucky, even if it is finished, and I was told that appraisers count only half of the basement space when valuing the property.

Not usually but it really depends on how many tenants are in the pool.

Depends on what Lane you want to be in..  

Additionally, i live in Chicago, so i won't see it before closing which is in 30 days. 

Or worst case, landlording is often an uncomplicated exit with a For Sale sign (and can even be a profitable exit depending on the market)...

If you pursue co-living properties, I would still highly encourage you to analyze the deal as an LTR as a backup strategy in case things go sideways.