VRBOs and B&Bs: let the market decide
The way I see it, we are talking about apples and oranges. The B&Bs are offering apples for sale and the VRBOs are selling oranges. The apple sellers don't want you to buy any oranges.
The thing is, the oranges didn't create the market for the oranges. They are just responding to the consumers' demand. There are some tourists who enjoy a B&B visit, and there are other tourists who prefer staying at an accommodation that provides more privacy and more flexibility for their needs.
I had a neighboring B&B owner referring to us who even had dinner in our cottage with those referred guests. It seems we do fill a need for even B&B owners.
All the VRBO owners that I have spoken with would be very willing to comply with the rules and costs that the B&B owners face in order to have a fair playing field. And further, none of my neighbors has asked for anything different from what they see. In fact, our property is so well maintained that I have had neighbors offer to buy our cottage and others who have thanked us for improving the neighborhood by building our cottage in the first place. The integrity of our neighborhood is as safe and respectful as you could hope for.
Let the market decide what the consumers want. Apples or oranges.