Money's not the problem. In SF there's tons of developers who would jump at the chance to tear down some ugly old faux-victorians to put up a highrise. It's the social cost (zoning, community boards, parking/transit regulations) that are preventative.

You're in luck: cities are constantly being rebuilt as developers tear down old buildings and put up new ones. Change the zoning, and gradually the city will shift.

Actually... the guy just reinvented Europe. With cities which grew organic when transportation was expensive, commercial and residential areas are close to each other. Even Sydney, Australia, is a nice city when you don't have a car, even for fathers who drop their kid at school in the morning (but Australia has other problems in terms of carbon emissions, probably coal electricity, long distances and meat).

And that's why USA dooms the Earth in terms of carbon emissions. The whole country is built with costless petroleum in mind. It doesn't require completely tearing down the cities (another comment suggested altering the zoning plans), but if there isn't a very strong change of cap in terms of city planning, it'll keep being unfathomable to get rid of your car as an American citizen.

The pollution tax (=integrating the cost of global warming in everything that's based on petroleum) is another way to solve it, but it will lead to the same result: Rearchitecting american cities.

Maybe you might get your wish if the "Big One" hits San Francisco again. If there's enough liquifaction, then lots of areas in the Bay Area will need to be demolished and rebuilt.

apparently japan is really good at this.