There is a lot of space inside buildings and blocks that must be kept open to permit windows in every bedroom.
When I first moved to New York, I illegally subletted a windowless bedroom. That let me save enough money to (a) enjoy my twenties and (b) launch a start-up. When I got a windowed bedroom, I wound up putting sound-absorbing black-out curtains on them for years.
> The actual problem is high land prices, slow permit approval processes, and restrictive zoning codes
These are bigger problems. But the the blind window requirement is a part of the second two. On its own, it isn't prohibitive. Tied together with a million other petty requirements and your minimum costs balloon.
The problem is you can't easily convert office buildings to housing without these, because the floor plates are too different.
Do we have cases of Japan or China converting industrial or office spaces into residences?
Since 2013, it's been classed as "permitted development" (so, automatically allowed as long as the building isn't listed as architecturally or historically important), and liberalised further in the early 2020s.
House prices have outstripped commercial rents for most of this century, and change of use is cheaper than demolish-and-rebuild, so I'd expect to see the trend continue.
The issue with unsuitable floor plates is real, though, particularly in larger buildings. One solution is to cut chunks out of the curtain wall, turning part of each floor into an open-air terrace which functions as a light well. The reduction in useable floor area means that's only really viable at the premium end of the market, though - a prominent (albeit mixed-use) example is https://www.constructionenquirer.com/2024/07/18/striking-new...
Sure, fire safety in homes is a good thing to have. But is it so good that we can't economically build buildings to meet them, and people end up with no home at all?