This type of construction is only so profitable because it's usually illegal, and therefore a critically undersupplied segment of the market. Developers are therefore eager to do it every chance they get. If it were legal to build this way everywhere, they would only do it in the places it made sense. Developers wouldn't be building 4-story condos in Contra Costa county for people to commute 50 miles into SF and Mountain View if they were alowed to build enough to meet demand in SF and Mountain View.

Where people want to build, the power-hungry folks in charge put restrictions in place and demand a troll toll to let a few projects through. And the folks in charge where nobody wants to build see the opportunity and seize it. It's just human nature, and it's the reason local government shouldn't be put in charge of density regulation.

There is plenty of single family housing in Italy, where I lived for many years, and where most other housing types are legal.

If someone is happy in their SFH, why would it disappear?

If someone has the money, they'll be able to build new ones too.

Yeah, maybe central San Francisco won't have many, as people cash out, but that seems pretty reasonable. You can go live in Lakeview Oregon and have a huge house on a huge lot if that's what you want.

The absolute construction costs for a high-rise are a lot higher than for a low-rise 4 story apartment building. If I can't fill a high-rise in your city, why would I build it? I'm better off building the low-rise and selling-through.

Besides - SFH's predate most restrictive zoning laws (which really caught on in the 70's). SFH's, at the edges of the city, aren't going anywhere.