This is the difference between constrained and unconstrained areas. For example, San Francisco is a constrained area since it's already bounded by other cities

This is the difference between constrained and unconstrained areas. For example, San Francisco is a constrained area since it's already bounded by other cities and can only increase housing by building higher or getting rid of parks. But the San Francisco bay is quite unconstrained, with extremely low population density and massive undeveloped tracts all over. Here, only regulation and laws prevent the cities from becoming bigger. In general, the vast majority of people live in unconstrained areas, not constrained areas. But because constrained areas are where you get the windfall wealth from housing, people in the physically unconstrained areas clamor to make themselves legally a constrained area by making it illegal for the city to grow out. So yes, there are limits, but these are political limits, not physical or environmental limits, and they are driven by incumbent owners with dollar signs in their eyes, not concern over nature.