House Hack with Roommates - City says not allowed?

[Natalie Schanne]

My friend wants to house hack by buying a 4/2 house, live in 1 bedroom and rent out the other 3 bedrooms. (Purchase price $190k, room rentals worth $600/mo each). House hacking would work out very well for wealth building by paying off his mortgage monthly (PITI approx $1500/mo). This is in Mercer County New Jersey. The neighboring township says they don't require landlord licenses / inspections for renting rooms to people in a house you live in. The lady I reached on the phone at this township said boarding houses were not allowed when I asked if a license was required to rent a room. I looked up the code she couldn't reference offhand and it looks like he could apply to have 3 'rooming units' in his house for a $5/year fee plus up to $200 (perhaps per unit?) in inspections. There are many local room share postings on craigslist for $600-900/mo. The area's newspaper says the community wants more 'affordable housing.' A 1 br apt starts at $1100/mo. If he buys the house and applies for the rooming units and doesn't get approved, he would flag his property to the township and face significant financial hardship due to an inability to pay that much rent. He might have to move out and rent the whole house (upon which 3-4 unrelated parties could all co-tenant the same house on a lease?!?) If he buys the house and rents to roommates and doesn't apply for rooming units, he might have problems with the township or with evicting non-paying tenants in court. (He reduces his risk by keeping everything clean and up to code, and by screening higher quality roommates.) The only examples in the local newspaper of code enforcement seem to be for slum rent-by-room $250/mo/room housing not up to code (electrical) being cracked down on because it was unsafe. What would you do? Should he buy it or not? Have you ever dealt with a township not willing to let someone (an owner occupier) have paying roommates (long term, not Airbnb) freely? It seems like a huge restriction of freedom, especially given property taxes are like $6000/yr for a $200k house around here. Thanks for your insights!