Any nonconforming lot existing on or before October 22, 1968, for use as a single-family dwelling, may have a building permit issued without an appeal for a variance, provided the new structure or addition does not violate the building coverage requirements, any height or setback requirements and the parking requirements and the nonconforming lot abuts lots on either side that are developed and the nonconforming lot is the largest possible assemblage of contiguous land under the preceding subsection. The side and rear yards may be reduced by the same percentage that the area of the undersized lot bears to the zone district requirements, except that no yard shall be less than 1/2 that required by this chapter or five feet, whichever is greater, as set forth in this chapter.