The bankruptcy risk does not exist for the federal government. So a government funded non-profit development project that's built by the same construction company (charging the same money) that a for-profit investor would hire, would save that 12-20% for that project straight up.

Yes for single family homes the calculus you describe makes sense.

But we aren't building ourselves out of this shit show with single family homes. I think most recognize that given the push for rezoning. So in my mind, looking at multistorey buildings is the only interesting scenario. And I think my argument that there's savings in the elimination of the profit and the "luxury" factors is reasonable.