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I think that every town has that law from years ago, and no one ever changed it. We get around that by having "apartments" in the house. Each bedroom is lettered, like I live in apartment A. That way, as long as there aren't 5 people living in 1 room you don't have a problem.
We also only rent our house, so maybe you could look into renting a house for 10 people or something, instead of buying one.
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