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As I understand it, it's about economies of scale. It's cheaper to heat enough for the whole block in one big unit than it is to have a couple dozen smaller unit doing their own heating. I haven't really studied it. I'm sure the Germans have, efficiency is a whole cultural value with them ;)

It still makes sense. If heat is produced by a burning something, it is is more efficient to do that in one dedicated place. It makes it easier to pipe exhaust away from apartments and efficiency can be higher.

Also gas pipes to every home isn't a thing in many countries.

If you burn waste, you have waste heat.