To be fair, the illegal building thing is a bit hyperbolic because loads of construction is illegal. when people illegally build the metal top floors they pay a fine and get taxed a higher rate. it often isnt considered abnormal or even a problem.
Until it is a problem Lots of pigeon houses on ground level too, the rooftop thing is just a population density/lacked land thing. Many small ones can probably wiggle their way out of building laws as they arent all structural
Also it isnt really illegal race gambling, just illegal gambling. exists all over Taiwan in other games as well. I think the pigeon racing itself is legal (dont quote me)
Depends when they were built. My inlaws have a 3 floor building that was originally 1 floor. They built it up themselves, it also has a roof structure. All legal because of the dates.
Lots of pigeon houses on ground level too, the rooftop thing is just a population density/lacked land thing. Many small ones can probably wiggle their way out of building laws as they arent all structural 
