There are vast range of opinions on whether or not it is wise to participate in Section 8 or other Govt-paid housing programs. 

In one case yhe host asked if I minded making the bed because she got tied up at work.

A 4+ bed house hack would be best option.

I'm in Austin, and been considering renting out a spare bed in my primary residence.wondering if I should consider this trend / news a net positive or negative (possibly better market for "type 1" STR, but increased regulatory burden across the board)

Westland MI fixer upper 3 Bed 1 bath.

There aren't enough buyers to drive the price up and rents can only be so low, so you can buy $90k houses and have $975 in rent (3 bed / 1 bath type houses).

Her house is a single-family home, 5 bed 2.5 baths in a nice neighborhood.

The result was an (admittedly well constructed) 9 bedroom house with a MASSIVE amount of living space for each 3 bed 1 bath unit. 

Each unit is a 2 bed 1 bath and 900 sqft.

My concern is the sqft and it's only 2 bed 1 bath, rental rate would be solid at 700-750 a month.