They don't seem to be weighing any factors at all, other than fire safety. Wood is renewable, cheap, cheaper to construct with, much more environmentally benign than concrete, very fire-safe (though not as safe as some), etc., etc.

As was mentioned by other commenters, affordable housing has a value that can be balanced against fire safety. Carbon contribution as well.

Everything has trade-offs. "Safe Enough" needs to be an allowable state.