You remind me of two things I have read here at hacker News in the last few months: 1. We have made substantial gains in productivity over the last few decades in many areas, but not in construction. The leading candidate for the cause is that we have increased regulations to keep things stable.

2. A private company in San Francisco was going to buy a downtown office building and converted into housing, hoping that even though that is incredibly expensive there would be enough demand. But then they realized that San Francisco had mandated a large percentage of new multifamily housing units must support low rent tenants and it made the whole project completely infeasible.