The referendum was designed to assist with the elevation of buildings above flood levels, not to allow the construction of larger buildings. The regulated size of buildings hasn’t changed, only how high those same sized building may be elevated. The 40-foot cap is to ensure that no matter what else may be calculated towards elevation, anything above 40-feet isn’t permitted.
For example: Suppose it’s calculated that the maximum a building might be elevated at the bottom to the Base Flood Elevation (BFE) plus four-feet - would be ten-feet above the ground. However, if adding 10-feet to the bottom of the building would cause the top of the building to be at 42-feet, then the building may only be elevated eight-feet, to the 40-foot limit.