I'm guessing it would be tough to make the numbers work demolishing a 4-story building and building one that's only 2-2.5x the square footage, especially with today's interest rates.

That's pretty hard to say in a blanket way, I wouldn't want to speculate. But there's never a bad time to fix zoning.

You'll lose a ton of square footage to compliance. Those wide doorways with non conflicting doors, wide staircases, required clearances around everything, all the other stuff that's been done to old apartments that isn't compatible with modern codes.

So that 2.5x square footage is more like 1.5x when it comes to the number of units of like quality/liveability you can pack in.