GDP would be increased if more people moved to NYC or the Bay Area? That's like saying if a company just hired more people they could make more money. It doesn't work like that.
The problem historically has been the distribution of that additional wealth. It's common to see cycles of increasing rent seeking, followed by de-urbanization/migration, and then a gradual return to cities.
Though if more and higher construction were legal, they could afford a bigger place in dense urban cities, too.
(Of course, the number of plots for single family houses is limited. But there's no limit to how big your apartments can be, if you are willing to stack them.)