* He is hurting the neighbors to the properties he re-rents. They arranged to live in residential neighborhoods adjacent to other semi-permanent residents, not an illegal hotel. Hotels are not found in charming residential neighborhoods for a reason: nobody wants to live next to them.
* He is evading taxes that are used to improve new yorkers' quality of life at little/no expense to local residents.
* Insurance fraud is a probable consequence of his business. Since it's hard to get commercial insurance for your illegal venture, if he has ANY insurance, it would be a renter's policy and maybe a personal umbrella policy. Any claims he made would be fraudulent.