If you plan to be in your house for a long time, driving down property values is a good thing as you will have lower property tax. I never thought property value was a good argument. Its not constrained by law or morals. Its all about demand. For example, a minority neighborhood will have lower property values for a similar white neighborhood. Now apply your logic about property values. The thing about bars and brothels, is that they are public nuisances. Bars are loud and brothels you have people coming(no pun intended) and going all night.

A better argument would be about health regulations and competition. It is unfair advantage for these home motels because they don't have to abide by regulations and aren't even required to be insured/bonded. There's also a public safety risk since health regulations aren't being followed.