It's an archetypal social coordination problem that can't be solved at a local level. If relaxed zoning pushes all new buildings into my neighborhood, because all other vote against it, then I'm going to end up with 20 stories of balconies hanging above my property but see no benefits, not even indirect ones like lower rents leading to lower inflation and prices etc. Some developer will simply capture that rent - both in the rent extraction sense and the real estate rent meanings.

A smart central planner can act for the shared benefit, they are sensitive to the votes of renters in some other high density area that also can't solve the problem locally etc.

My state did something similar recently as well for land within a quarter mile of transit, they have to be zoned for a minimum number of housing units, and parking minimums cannot be enforced in that radius. Some of the municipalities impacted are suing the state.

That statement reminds me of ikiru.

(an akira kurosawa movie about a japanese politician)