You keep telling yourselves that while we in Seattle keep building and funneling more people that would have lived in San Francisco here because we're able to keep up with Demand ;)
There has still been a noticeable increase, but in part because the City of Seattle underestimated the rate of future growth in demand (https://goo.gl/QKpb36). (The city is actually making moves right now to increase housing supply over the next few years to prevent accelerating increases in rents).
Demand, however, is not the only factor commonly cited as putting pressure on housing prices. As tech workers flood the city and mean incomes outpace inflation (which has a positive effect on the overall economy), their purchasing power increases. New construction is of comparatively higher quality, especially in neighborhoods like Capitol Hill, which was not nearly as desirable before 2000.
This is another part of the “noticeable increase”. As neighborhoods become more desirable (such as SLU, Ballard, and Capitol Hill), residents suddenly find themselves paying a premium (which is not reflected in mean pricing). I believe this is much of what has contributed to the idea that rents have risen dramatically (even when the data says otherwise).
Things may not be optimal (there are certainly challenges with market mismatch and misplaced incentives), but I don't think anyone in the industry is saying the major challenges are regulatory.