I feel the same way and it drives me nuts. When I bring this up many people flatout disagree: they either say that the new buildings will be just as expensive, or (in the bay area) complain about earthquakes. It's a very pressing issue really exacerbating the effects of income inequality, and the saddest part is how self-imposed it is.

This whole thing ordeal really makes me wish for mandatory economics courses: this is one of the simplest, clearest cases of supply and demand, but it's so rarely perceived as such.