Toronto (average $/sq ft to build given range) Medium Quality Tract House (assume 1 story): 180 Medium Quality Highrise (50-80 stories, average 65 stories): 270
This comes out to $1.38 more per square foot for each additional story.
Let's just assume land will be twice as expensive in the city center as at the edge of that metro. Assume the cheapest land is $200 per square foot.
Assume that the house will be built on the cheaper land, and assume one dwelling per story for simplicity.
As you add a story, the cost of land is halved. After adding the 65th story, it is divided 65 ways.
By adding the linear curve of building cost over the inverse curve of cost of land divided by story, you get the cost per square foot per story. In fact, this is maximized for a single-story building as land costs are born by a single tenant. Cost per floor falls until construction costs overcome the falling cost of land.
The minimum cost to add a story, $214.67 occurs for the 12th floor.
Again, back of the napkin and very naive.
A highrise will probably have less square footage per dwelling though. If we halve that the cost of land falls even faster, with building costs plus land costs bottoming out at $203.51 per square foot, for the 8th floor.
Finally, I added an $8,000 per square foot premium at city center. With this, the cheapest floor costs $348.44 per square foot for the sixth floor.
So as land prices become steeper from city center to periphery, it actually makes more sense to disperse. Likewise reducing dwelling size does not have as much of an effect as rising build costs.
