Enforce zoning regulations and apply rental laws or hotel regulations to Air BnBs. If you make them actually follow the rules, it suddenly becomes vastly less profitable.
Enforcing is unfortunately really difficult because the incentives are too strong. We have rules here which are meant to prevent AirBnB and similar by limiting the number of nights any domestic property can be let in a year. So all the hosts just jump from site to site and change the descriptions slightly to get around it. And it’s so brazen. They use the same photos and everything. The really organised ones have whole buildings and when you book they’re non-specific about the unit you get, so it’s very difficult to actually track which ones are rented at any point, particularly when the enforcement teams are so underfunded.
Like any business, they should be subject to audit and inspection at any time.