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However, new construction codes that strictly regulate fire safety have eliminated this technique, and for all intents and purposes party walls are no longer in common use.
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They're allowed by building codes, the issue is zoning; in newly established zoning districts, zero lot line construction is rarely if ever allowed. Zoning also establishes minimum lot sizes, street front width etc. Not to mention mandating generous setbacks and minimal coverage... There's progress happening in some areas though.
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Party Wall vs Fire Wall
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Both are fire walls. The left is a party wall and the right is a pair of face-on-line walls. The effect is the same. Party wall have some drawbacks but they do give a little more interior space on a narrow lot.