Question

I live in an area with many private houses.
The law where I live is that renting out basements is prohibited.
But despite that, there are lots of people who rent out their basement, and I’ve never heard of the council enforcing the issue.
Everyone knows there are people renting out basements, and I think you can even find ads for housing units on Yad2, so this violation is known to all.
 
In such a case, can one argue that the rule of “the law of the kingdom is the law” is not binding, since there is no enforcement and the violation is done openly, and thus the public is showing that it does not accept that law?
 
The reason for the prohibition that I can think of is that because of the violation, more people will live on a certain street, there will be less parking, and someone will pay less municipal tax, since one house will include the tax for both of them, and then the general level of services for residents will decline because of that rental.
But that still feels to me like a strained reason to prohibit it.
What does the Rabbi think in cases like these?
Would Jewish law say that in this case it is forbidden or permitted?