My current home has a daylight basement and the previous owner put in a kitchen with no range or dishwasher. The dishwasher was added after inspection. We rent it out to my father half the year and to a stranger the other half, with utilities included. I don't think the city can have an opinion about this (except for the dishwasher, which is probably not consistent with zoning) because I am simply renting part of my home, as anyone can do.
I am interested in doing something similar with a rental property. I would have 4 bedrooms rented on the top floor. And I would rent a daylight basement flat to someone else (with minimal kitchen. no one cooks anymore, anyway). Utilities would simply be included. Any thoughts on this?