The section is simply titled ‘Use non-conformance’. There is no reference to the non-conformance being limited to the lot or the structure. I believe the non-conformance can be as you say, that possibly the lot is smaller than zoning now requires but that it can also be because the structure was constructed closer to the property line than the current code now wants; that happens a lot on smaller lots, particularly due to the zoning changes you refer to. Or maybe the non-conformance is due to the structure being larger than current height limits or a use no longer allowed in that zone. In any case I believe the following sections of the code come into play regardless of the non-conformance; and that includes the ‘prolonging the life of the building’ clause.

Also there are many places beyond the R4C zones that have had their minimum requirements changed so that whole neighborhoods are non-conforming.

It really isn’t about what Mr. Mahler wants. The city’s Non-conformance Code (Ch. 55, Art. VII) says:

It is the intent of this Chapter to recognize that the eventual elimination, as expeditiously as is reasonable, or [sic] (of?) existing uses or structures that are not in conformity with the provisions of this Chapter is as much a subject of health, safety, and welfare as is the prevention of the establishment of new uses that would violate the provisions of this Chapter. …”

It also says that a nonconforming build may not be “Structurally altered so as to prolong the life of the building.” And it says, “A nonconforming structure shall not be replaced after damage or destruction of the nonconforming structure if the estimated expense of reconstruction exceeds 75% of the appraised value, as determined by the building official, of the entire building or structure, exclusive of foundations.”

This section of the code seems to conflict with historic district efforts and I do not know where they get resolved. It seems important to know how many buildings in this district are nonconforming.

The criteria outlined for a notice to proceed with demolition in a historic district include a provision for financial hardship. See (c):

8:416. Notice to proceed.
(1) Work within a historic district shall be permitted through the issuance of a notice to proceed by the commission if any of the following conditions prevail and if the proposed work can be demonstrated by a finding of the commission to be necessary to substantially improve or correct any of the following conditions:
(a) The resource constitutes a hazard to the safety of the public or to the structure’s occupants.
(b) The resource is a deterrent to a major improvement program that will be of substantial benefit to the community and the applicant proposing the work has obtained all necessary planning and zoning approvals, financing, and environmental clearances.
(c) Retaining the resource will cause undue financial hardship to the owner when a governmental action, an act of God, or other events beyond the owner’s control created the hardship, and all feasible alternatives to eliminate the financial hardship, which may include offering the resource for sale at its fair market value or moving the resource to a vacant site within the historic district, have been attempted and exhausted by the owner.
(d) Retaining the resource is not in the interest of the majority of the community.

So it’s an option for a property owner to make the case for undue financial hardship before the historic district commission.