As for the zoning question, it's probably the result of busybody town governments trying to control every aspect of the city lest some developer ruin their perfect vision of the city. I can guarantee that if you propose to build a big shopping complex in the middle of the city you will have people out to protest for all kinds of reasons. They will protest because it will raise their land values (and taxes) too much and force them to move. They will protest because it will bring in people and ruin their "quiet" neighborhood. They will protest because it will affect local water prices. This is how a lot of regulation gets started, because someone is trying to prevent something from happening to their backyard.
There are legitimate complaints, I think - no one wants a pig offal disposal site next door in their residential neighborhood. But we've gone way overboard in letting zoning dictate what can go where.
> They are not a typical case.
But they absolutely are on YC's radar, because San Fran and the bay area in general are ground zero for the housing crisis in those kinds of desirable places.
People absolutely do live downtown. Indeed, one of the biggest trends in housing is people moving back in to downtowns.
> It doesn't make sense to make a walking mall in an area where few people will live in walking distance.
So why all the zoning regulations to forbid it? Markets generally won't build where it doesn't make sense. So let them do their job.
> "big fast busy roads"
You can't build your way out of congestion: http://www.citylab.com/commute/2015/11/californias-dot-admit...