But what if you own the place and only rent out one apartment as side income? I don't think there should be any regulation by the government as long as nobody is hurting anyone.
That's a separate story from the author of the article. The property owners / leasers here are acting analogous to unlicensed hotels. This violates the zoning, heath, and safety laws surrounding hotel industry as well as taxes on renting out property. City governments have no interest in going after the small fry who rents a place out every now and then, but this is clearly property management turned small time business. The slippery slope is when you start seeing investors, realizing the profits, renting out multiple units. This pushes up housing prices in the area (Contributing to gentrification), increases noise and waste, and takes business away from the hotels that actually bother to follow the written law.