Hamilton's permitting and regulatory environments, minus the 30-storey limits, are one of the most friendly in the GTHA. Development in the downtown enjoys no community charges, development charge discounts which amount to some of the cheapest DCs in the GTHA (around $22,000 for a 1-bed unit, compared to $52,000 in Toronto and $91,000 in Vaughan!), as-of-right zoning with a relatively simple site-plan process, affordable and simple landscaping and construction staging requirements which help keep construction costs down.. no green standards or parking requirements, etc.
It's one of if not the cheapest place to build an apartment building in the GTHA. Which is important because it also commands some of the lowest rents.
Yes, it's costly and complex to try to do more than 30-storeys, but that size of project can work fine financially and if you do the 30-storeys you can build an apartment building relatively cheaply and with minimal red tape from what is typical in the rest of the GTHA.
The reason Hamilton hasn't seen more growth downtown isn't because of municipal red tape or financial burdens placed on development, it's because the downtown has a certain reputation and market realities which make it challenging (relatively low rents and sale prices, dense downtown sites but still relatively high parking demand, etc.).