In reality, democracy can be commandeered by well-organized groups of people that vote as a bloc. At the local level, this means that well-connected homeowner associations wield the power to ban density and commercial activity near where they live.

The oft-cited counterexample to US restrictive zoning, Japan's permissive zoning, works because in Japan zoning type is decided at the national level and there are only 12 types of zoning that define maximum nuisance (so a blacklist). US zoning gets extremely nitty-gritty and is functionally a whitelist.

Yes. It's rules by the God Emperor Money II.