Unfortunately you can't blame this on zoning laws, because if you compare areas with and without strict zoning laws, you don't see much difference in this regar

Unfortunately you can't blame this on zoning laws, because if you compare areas with and without strict zoning laws, you don't see much difference in this regard. E.g. San Francisco, for most of it's history, didn't have strict zoning laws. Yet, like most cities, you pretty much never tear down a whole neighborhood of two story buildings to replace them with 4 story buildings. Once an area is built up, it's built up. Whatever height/density there is tends to stay there. The way cities grow is by growing out -- recruiting new land -- and also via infill. Existing structures just aren't torn down that often. It happens, in the sense that houses are condemned and sometimes replaced with something bigger. But we don't see it happening at a fast rate, whether there are laws against it or not. Zoning laws are relevant at the margin -- when you add to the city, are you adding 2 story buildings or 4 story buildings. But once the neighborhood is built, that's the neighborhood for the next 100 years, whether there are strict zoning laws there or not. Assume no zoning laws at all. You as a contractor will need to contact all the individual owners and negotiate some deal with them to tear down a perfectly good property and replace it with something a bit taller. How likely is that to pencil out? You might be able to tear down one building, but not the whole neighborhood. The neighborhood will stay the way it is. There is also another issue at play, which is that once the first tall building is built, the land values go up in the other buildings around it. Land is one of those things where you don't need to actually build the housing in order for the landowner to benefit financially. The developer, after tearing down the first building will have to pay much more to buy out the second. And even more to buy out the third. Very quickly, the arbitrage profits that would drive a market solution disappear, so you don't get market solutions that support tearing down existing buildings on a mass scale. Historically, cities were changed like this after fires or earthquakes, but not in response to market forces. All those people who think that the reason Palo Alto is full of single family homes is just zoning, and if we were to get rid of zoning, Palo Alto would be filled with sky scrapers are in for a big disappointment. Market forces don't work very well here. Regardless of what happens with Zoning, Palo Alto will remain pretty much the same for a very long time, barring a massive fire. Even Nero had to start a fire, and he wasn't constrained by zoning.