And Sprouts on Spring Garden and Delaware, too!

It's not uncommon for hotels to deny folks with local addresses, especially budget hotels. It's very much due to repeated bad experiences with locals using hotels and motels to throw parties and trashing hotel rooms. And this isn't just Sonder, many Hampton Inns have that policy, Days Inns, Motel 6's, etc. Here's an article from a completely different area discussing this: https://www.citizen-times.com/story/news/local/2019/06/19/answer-man-local-hotels-wont-rent-local-residents/1485686001/

I agree with you though that they should have been clear about this policy from the get-go. You may want to reach out to the state Attorney General's office and Better Business Bureau with complains.

Ask your landlord if they’d be willing to let you put an antenna on the roof? I lived in Berkeley many years ago, and had shit reception in the apartment, but you could see the Sutro Tower from the roof (it’s a huge TV transmission tower that covers much of Bay Area), so I asked the landlord, and he let me put up an antenna and point it straight at Sutro, and drop a wire down to my balcony — great reception, and I left it for the next tenant.