Setbacks, parking requirements, and permits are some of the imposed fixed costs that a developer would have to pay to make a 0 square foot apartment. Then you

Setbacks, parking requirements, and permits are some of the imposed fixed costs that a developer would have to pay to make a 0 square foot apartment. Then you have natural fixed costs of design, engineering, acquisition. Still, it mostly comes down to a developer's understanding of the market. We're so housing starved that there's demand at all size levels. Why would they choose the less profitable path?