I'd argue not even morally true. I support drug legalization, but I definitely want legal protections against someone else setting up a meth lab in the condo next to me. Externalities nearly always exist, and market imperfection makes it impossible to contract them away.
It's a genuinely thorny issue in this case, though. On the one hand, you can easily imagine mechanisms where allowing widespread commercial short term tenancy in your building would increase crime rates and put your own self and property at risk. At the same time, it's abhorrent to me to imagine my condo building saying that I can't have non-paying visitors over several nights per week, which would likely have identical effects.
It's a genuinely thorny issue in this case, though. On the one hand, you can easily imagine mechanisms where allowing widespread commercial short term tenancy in your building would increase crime rates and put your own self and property at risk. At the same time, it's abhorrent to me to imagine my condo building saying that I can't have non-paying visitors over several nights per week, which would likely have identical effects.
So where does the line fall?