> Why is this such a different restriction

I'm a little confused why this question would arise. Use of property, private or otherwise, for illegal use is, well, illegal. Your example cleanly falls under the illegal classification.

I would like to note that the city council is penalizing private property owners under the assumption of malice, and not in good faith. They've unburdened themselves from proving malice, which is a sneaky encroachment of jurisdiction that they aren't entitled to.