I question if this is really their final approach and wonder changing the deal structure in times of the most dire situation during high interest era is the right approach. 

As for you specifically most likely yes but its not that strait forward as @Kory Reynolds points out 

And if we reach such a dire circumstance where this is no longer the case, I think we will all have bigger problems.But hey!

What does the city expect will happen when you tie the hands of the police department and make the regulations so dire for investment; why would any major developer go and invest in the city?

That's a pretty dire situation as an economy we are currently in with no relief in sight.I'd sell as a lease/option to someone who can’t get bank financing (such as a successful business owner), getting 20% down and basing the strike price as a 20% premium for 2 or 3 years down the road, charging a reasonable interest rate to get cash flow.

Compared to the primary market in Nova Scotia (Halifax), land and property values are a fraction of the cost in Cape Breton, yet the demand is dire.

hardly, the market does fluctuate here but it's the most dire supply and demand market I've seen (other than some CA beach towns).

Look up the situation the rapper Killer Mike went through when he attempted and was denied…it’s crazy he didn’t get approved cause his situation was BAD) so the fact that she was able to successfully do it meant that she was in serious, dire straits.

If a mortgage broker, while having knowledge of local markets helps, it's not nearly as dire to be local as it is for a real estate broker. 

We have seen a few done but the rates were 15%+ and min 5 points which to me is very expensive, but it makes sense due to the risk as most people who need them are in dire straits and are over leveraged.