There’s a limit to how many people are interested in staying in hotels in a city.
There’s also the zoning issues between residential and commercial.
There’s also the fact that it’s far easier to buy a residential home and rent it than it is to tear it down, build a hotel, hire staff, and operate an actual business.
I realize you have a knee jerk need to defend landlords and reject anything that interferes with them making a profit of other people’s basic need for shelter, but try to take a moment to think if your argument sounds in any way reasonable before just throwing it out there.