The general response to this idea depends mostly on what building he opts to commandeer for it. Abandoned buildings are still city-owned, so they're not really up for grabs without permission or purchase, but there are enough of them in the outer regions that it isn't being especially well-guarded. The closer he is to the factory, the more likely it is that the residents will find out and politely ask him to move along, or at least pick a different building, if they have upcoming plans to reconstruct the spot he picked.

If he's caught or asks permission, he can get away with using a building they aren't planning to fix any time soon, likely with a small monthly fee just to satisfy some paperwork. In other words, they wouldn't aggressively stop him, but they may force him to relocate or pay a fee for not asking first.