When you eat up the marginal supply of housing it can greatly increase the cost for everyone vs adding a couple dozen low wage jobs for which they’ll also have trouble affording to pay rent themselves. Tourists are not paying taxes to the city, their needs should come second to the citizens that live there.
I don't think it is quite accurate to say that tourists are not paying taxes.
Tourists patronize all sorts of businesses (lodging, transportation, entertainment, food, retail) and those businesses are paying taxes. The revenue from tourists is part of that business equation. Of course there are also specific taxes paid by tourists (airport fees, port fees, hotel room taxes, rental car taxes) as well as regular transactional taxes paid by everyone (sales/service/vat).
The marginal supply of housing argument is often a bit ridiculous. Many cities will give their best real estate to hotels and create entire neighborhoods where locals can basically not find housing. Meanwhile some Airbnbs interspersed through the city is the thing driving up housing cost. Just start converting hotels into apartments and you've solved the problem.
You say "tourists are not paying taxes to the city" which is certainly wrong for San Francisco and for most other cities I've travelled to as well. In San Francisco, there is a 14% occupancy tax and it is taken by Airbnb automatically during booking as they do in hundreds of cities. Compare this to Craigslist where I used to rent and nobody ever mentioned paying tax once.
Finally, many of these cities literally have tourism as their number one industry. Its a bit dangerous to start saying that the people who fund your city are second class citizens since they only pay occupancy taxes and not income taxes. In fact many of the areas against Airbnb like Miami Beach have bent over so far backwards for tourists that all they care about are the hotels now.
Taxes in SF are about $3,300 per capita ($2.7b). Hotel taxes bring in $300m revenue, basically what it costs the city for it’s homeless budget. Also tourists are not voters they have no long term interest in the city, cities should be prioritizing around the residents not tourists.
No, converting hotels into apartments doesn't solve the problem. The total amount of spaced used by Airbnb and hotels combined is too small compared to the need for housing; the only thing that solves the problem is removing the height limits, and letting people put up taller buildings.