Step outside of theoretical economic thought experiments and try living in a formerly quiet neighborhood or building suddenly experiencing an influx of loud drunk littering assholes. Residential areas are desired as residential areas for a reason. I live in NYC and sure as hell don't want to live around Times Square. There are actual people living in these cities who want a decent quality of life where they live.
Echoing many others in the this thread, in a previous apartment in a residential area of Manhattan someone down the hall starting renting their unit to Airbnb visitors. It was a nightmare, but thankfully the landlord caught wind in a few weeks and kicked the person out.