That isn't actually what happens -- and the misunderstanding is what causes so much of the conflict.
If you rezone for high density, the price per square foot goes down, but the price per acre goes way up -- because suddenly developers will pay you a mint for your land so they can knock down your house and build a high rise there.
The people who theoretically lose out are the people who own property way out in the suburbs, because most people won't want to live there and spend two hours in traffic every day once they can afford to live in the city. But even they don't really lose out because now they can afford to live in the city and the value of not having to sit in traffic every day is worth more than what they're losing on their house.
The whole thing is just a huge misunderstanding. A cynic might suggest the narrative was devised by the banks to drive up mortgage loan principal amounts. Or the car companies to keep people from living in places with viable mass transit.
Either they let the pressure out gradually or the thing is going to pop.
Probably not.
> Companies will move away from areas where their employees can't get hosting.
And if that happens in even a small degree, housing prices will drop, relieving the problem. It's only a problem if their is a sharply threshold where below which no one moves out, but just above which lots of companies do. That's not entirely implausible, but it's not all that probable.
> Not many have to move before the rest start to follow
That right there is the highly speculative part; if it's true, you have an out of control positive feedback loop, but otherwise it's a self-controlling negative feedback loop.
The USA has never had housing priced at such a high number of hours of work before.
If the roles were reversed I doubt these observers would be calling for a change in narrative.