Apartments are residentially zoned. Hotels are commercially zoned (for good reason).
Turning residential homes into unregulated mini-hotels at scale depletes housing stock, and is a nuisance to residents.
This law effectively blocks residential homes from continuing to be used as hotel businesses operating out of residentially zoned areas, allowing residential units to once again be used as housing, and removing the nuisance to residents.
Please explain why you see this as a NIMBY net negative for housing.