Huh? I don't get what this has to do with what I wrote. That sounds like it is about residential zoning requirements. You can build flats here, and especially you can section your old buildings into umpteen tiny apartments. You can't tear down the architecture that makes this town a tourist destination, but that's about it.

(Actually you can do that to, if you just buy it up and let it fall into disrepair, argue it has no value now and tear down everything but the facades. That's how we got the aforementioned mall)