Are there any examples of cities that have ever built down? You'd get the housing, but then there would be fighting over the scarcity of windows.
And fighting over real window space is a far cry better than fighting over any space. As-is, there are even parking garages taking up nice window space in buildings here.
The geography looks a bit hilly in SF; it might be cheaper to dig under those hills than just going straight down from a flat area.
Maybe I'm just completely naive, but anything seems better than the current solution of doing nothing.