“I’m sure there are fire laws.”
Bingo!
There should also be sanitation laws regarding mattresses and food one would think, not to mention the potential liabilities the state is subjecting themselves to. I can think of so many scenarios which would end up in a lawsuit against the State. At the very least they should make them all sign some sort of release agreement if they are going to stay there. In addition, is this building not now functionally a motel/hotel and subject to all the taxes and regulations of such a facility? One could not simply open their home up to thousands of strangers and let them stay there night after night could they? At some point it is a “business” and is competing with other “Inns”.