Between 2001 and 2011, the number dwellings in Toronto increased 11%, while areas 30km from the downtown core grew about 35%. You can clearly see the effects of the 10m restriction on urban sprawl at p. 11 of the city's census backgrounder:
http://www1.toronto.ca/city_of_toronto/social_development_fi...
Detached homes and town-homes use twice as much energy as apartments, and people commuting 30km to the city generally drive. There has been an uptick in apartment construction recently, but these units are generally too small for families because developers find it more profitable to sell mini-suites to young bachelors.
I don't think very tall buildings are the answer. More and better communal services and smaller more efficient properties. I think that would go a fair way.
Back in the day, America, and even in Britain, housed their servant class.
Today, sure the servant class is "free" to the degree they're not literally called servants, but I think we're doing things worse when it comes to housing. This servant class is priced out of the employer's neighborhood market to be sure, but often all surrounding neighborhoods, and increasingly even the town, that their employer resides in. They're effectively exported at the end of their service day, and imported when needed again the next. I think it's disgusting.
I think the true cause of the unaffordable housing is the insanely low interest rates. The people at the helm are attempting growth at all costs.
Edit: it is really interesting to contrast Toronto with SF. Both are really nice places to live without cost of living concerns. Both have insane home prices. Rents are relatively cheap in Toronto because of basic demand and supply. SF has great paying jobs, Toronto does not. Will be interesting to see how things pan out over the next decade in both cities.