Edit: Unsurprisingly, the top post on this very page is now a form of this argument.
One problem, though, is "stickiness". I wouldn't move to a different city for $1/month. I probably wouldn't move even for $100/month. Why not? Well, I'm not single, and I have kids. It's not just that I'd upset everyone's routine - I'd also have to move all this stuff. I'd also have to sell my place and buy (or rent) a new one. Total cost to me: Probably in the $20,000 range. I'm going to do that for $100/month? No way. Even for $1000/month, it would take 20 months to pay back, not counting the time and aggravation.
So cities are "sticky". I'm stuck here; it takes a seriously better situation to break me loose.
Many people have lower thresholds than I do; but for most people, the threshold is some way above zero. (Exceptions do exist; if the current situation is socially or emotionally difficult, they may move to something even if it's economically worse.)
Isn't this actually true?
I would love to pay less rent, and don't mind having higher density. But I can also see why someone doesn't want those.
Walk by any of the BART stations in the East Bay (even Downtown Oakland), and you'll see vacant fields and mostly empty parking lots. The area near MacArthur BART could be densified to a crazy degree without displacing a soul.