Consider Japan, which has building restrictions to avoid eternal shadows. Building height is a function of the setback from the street.
A buyer may well want a taller building, and a builder might well be happy to provide it, when the city is dead set against it.
What is the mechanism by which "the market" balances out the desire by the megarich to live in tall towers in NYC, with the desire by those who use Central Park to not be in shadows more?
It doesn’t help an owner if they build units nobody wants to live in because of shadows, no parking, etc.
That is, if the megarich enjoy the 50 mile views and don't care about Central Park at all, then it can smother in shadow, yes?
And the only mechanism for the people who want to have sunlight in the Park is to make the megarich either socially or physically uncomfortable enough (perhaps by threats of violence?) that they decide it's time to move away ... or buy more security?
If so, your mechanism seems rather prone to encourage social unrest.
If I was a builder, my incentives are
closely aligned with the city
I'm planning to sell all the apartments and move on to another project, so I won't have to solve any parking problems residents or locals end up having.
I have the option to add an extra floor on, so there would be 12 apartments - but no guest parking any more.
What do you imagine my incentives are?
I won’t replace parking with units unless that makes the building more valuable overall. If there is a strong demand for parking spots, the existing units are likely to lose value by having no parking. And I’d also have to shell out cash upfront to compensate them.
If I was a builder, my incentives are closely aligned with the city - build something that appeals to buyers. If I build a fancy apartment building where everyone owns cars but I provide no parking, well those aren’t going to be very desirable.