There is a large supply of housing that is available to customers that want to purchase it. The idea that two people can't make a consensual exchange of value is antithetical to a free society.

This is a good thing, and this is not antithetical to a free society.

Both Uber and AirBnB knowingly break the law as part of their business model.

Zoning doesn't allow the kind of business that AirBnB has, they just don't care.

One could very well argue that maybe the laws need reform (as I do) but that's another story; the inherent ethos of YC et. al. is to err on the side of breaking the rules.

Surely that's true, but nobody can agree on which exact rules need to be broken. :)

So you'll forgive me when I call the police because you're building favelas in your back yard and have 20 micro-rentals.

If you rely on the power of the state to be the ultimate enforcer of contracts and property rights, the state has the right and duty to delineate which contracts it will enforce.