What you described (strict building requirements) is, in fact, a sociopolitical problem, not a technical one. We used to build houses for much less. They were worse houses. Many people would not like them today. Others would. They are not allowed to have them, though.
That's a real problem, but will correct itself eventually. In the oldest parts of the oldest cities in the US, mostly the nicer old buildings survive for the long haul unless they have historical significance. (e.g. Paul Revere's house in Boston.) Eventually the value of building a nice building on that land will surpass the value of keeping a shitty old one there. I'm more concerned with the explosion of shitty quality "luxury" 5/2 buildings being blighted and falling apart right when they stop inflating market value in their neighborhoods and pushing people out.
