The zoning and permitting regulations prevent you from building reasonably on land that you already own. There are plenty of wealthy individuals and developers in San Francisco who would love to tear down two or three shabby Victorian houses to put up a five-story 20-unit condo if they could only get the project approved.

San Francisco in particular makes it extremely easy for neighborhood residents to impede projects that would be automatically approved in any other city [1, 2]. This is why nothing gets built here, it has nothing to do with the cost of land.

No developer can afford to put up with a five-year battle with neighbors who complain about the shadow that the new building will cast onto their back yard, or to pay for fifteen $X0,000 bullshit environmental studies that the city will make the developer conduct as a "compromise." And remember, these are for designs that are completely up to code and that are zoned legally.

[1]: https://sf.curbed.com/2013/4/17/10252934/what-the-heck-is-di...

[2]: https://www.sfgate.com/bayarea/nevius/article/Discretionary-...