This manifested, since the early 00s, in housing construction that was mainly due to the mayor and some council-members influencing the planning department behind the scenes.
But then, the YIMBY argument (which is admittedly somewhat wonky) has within the last decade taken root broadly among the electorate, and there has been a lot of such large developments built - Hollywood has been transformed. It has also manifested in the resounding defeat of Measure S (went down 31/69 %, see https://la.curbed.com/2017/3/7/14850898/live-election-result...) in LA.
Of course, it's not 100% YIMBY. There are plenty of cases where neighborhoods have been transformed too fast, especially by house flippers (who are not really creating new housing), and there has been strong resistance.
You are correct that people think like that. But it is nearsighted because even if the price of your home goes up, you cannot sell it because you need a place to live. It is a lose/lose. It takes away a significant part of purchasing power. Money that could be spent on shopping, entertainment, etc is used to pay the mortgage. Younger people are even more screwed, it is a tax from the young to the old.
It is forced savings for retirement. Most people downsize once their kids leave home, cashing out their equity (as long as you haven't cash out refi'd your home to buy cars and vacations).
Except you can't do that in California, because then you're walking away from your Prop 13 "rent-controlled" property taxes.
California just passed legislation -- with teeth -- to stymie the attempts of local municipalities to block development.