> There are apartment buildings in Hell's Kitchen with communal toilets and showers for each floor. There is still running water to each apartment, but I'm not sure that has to be a requirement. (My college dorm didn't have running water.)

You're talking about prewar walk-ups that have been converted to de facto SROs. Also, those are mostly downtown, not in Hell's Kitchen. They're cheap and mostly occupied by young people who can't afford anything else, because they're incredibly undesirable ways to live, limiting their market rental price. Some number are also rent-stabilized and occupied by longtime residents, for the same reasons.

There is no way that you can seriously argue that doing this for newly-constructed skyscrapers would result in units that can be sold at the price that the building owners are demanding. There's a reason no new construction uses this model except for dedicated affordable housing (to the extent that's even built anymore). People simply do not want to live like that, and the market reflects that.