A number of huge red flags here:
As noted in the [original] email venues are reluctant to host these events. If the professionals don’t want to touch it why should you?
Where would the guests go to the toilet?
Who will clean up afterwards? There will inevitably be huge amounts of alcohol and probably illicit drugs.
Where would the residents park their cars? And who will pay for any costs? Or if they leave them who will be responsible for the inevitable damage?
As noted by Jimmy: How much security will be provided?
And how will they know who has a legal right to be there? I.e. guests and residents? Will they prevent unauthorised people entering the residential areas?
Does the host have public liability insurance?
Just to really convince you that this is a really bad idea go to the local police station and ask them about 18th birthday parties held in semi-public areas. Maybe even mention the name of the resident and see if their eyes roll.
Oh and if for some reason you decide to let them proceed, see if your insurance allows for this type of function and whether or not a riot by invited guests is covered.