> Perhaps this is me being an ignorant American, but the idea of the government telling people how to use private property doesn't sit well.

Yes, it's you being both ignorant and american. This argument quite directly, without any slopes (slippery or not), extends to for example acquiring a piece of land, building some housing at premium costs and then slapping a factory (and waste landifill, for a good measure) on the rest of the lot.

Housing regulations exists for many abundant reasons. Living quarters vs short-time rentals drastically change requirements for and load on surrounding infrastructure, which is built out based on established zoning.

Housing used to be relatively cheap in Spain which has resulted in huge swathes of the main cities and tourist resorts becoming almost entirely airbnbs. The social/economic implications could have been predicted long ago.

> the idea of the government telling people how to use private property doesn't sit well

Between zoning, easements, nuisance laws, government has a lot of say in how you use your private property. Owners even stepped it up a notch and invited HOAs, a quasi-government that has even more say about your property.

Unfortunately, people love telling their neighbors how they should live.