That's not such a bad thing. The market has demonstrated that hotels and similar will be built until supply mostly meets the demand.
No one will build affordable housing when they can build expensive housing instead.
This problem is due to restrictions on supply. Consider the statement, "No one will build affordable cars when they can build expensive cars instead"
1. Limits on the height of new buildings
2. Limits on the ability to demolish or extend existing buildings
3. Limits on the minimum size of new apartments
4. Limits on the number of people who can live in an apartment
Actually I think what we're seeing is precisely that this is not happening. If that were the case, hotel rooms in NYC would not cost 2-3x what they do in the suburbs. The price is high because short term rentals are scarce.
Its the same problem SF has. I completely agree.