It's a chicken-egg problem. Desirable places tend have an ecosystem that offers a high quality of life (as agreed upon by the demand-side of the market at the t

It's a chicken-egg problem. Desirable places tend have an ecosystem that offers a high quality of life (as agreed upon by the demand-side of the market at the time). Local coffee-shops, a decent arts and music scene, acceptable public transportation and proximity to work (sociologists have conducted studies which find duration of commute is a direct function of quality of life) are pre-existing features which exist within the those high-demand/low-supply areas. You can gentrify and build out (i.e. Williamsburg, Oakland) gradually building those ecosystems out with it, but in high-demand places like NYC and SF which have a fixed area of land, you can only build up a certain amount in certain regions, and only build out a certain radial length before your commute becomes 90 minutes. Zoning laws controlled (as you mentioned) by incumbent lessors/landlords and NIMBY's who currently own property (and don't want a new co-op or apt complex housing to go up because they'll lose their scenic view) contribute to this problem. "Create more" in those spatially limited/legally restricted regions is difficult. You can region shift and build out there (ie. there are tons of homes available in Kansas one could buy for 3 months of an average SV engineer's salary) but it lacks the ecosystem that, say, SF offers. In places like greater London it's an even bigger problem due to even higher density (you can't really build out into the English Channel).