Supply is not just limited, it is fixed. When you pay rent you are making two distinct payments wrapped up in one. First is for the actual accommodation/building/apartment and it’s maintenance. The second is for the mere footprint of the building. Sometimes these two payments actually go to two different people.

There is a problem with limited supply of units, yes, but in reality the majority of cost of living comes from the second type of payment: the fee for the ground rent. The ground is in fixed supply.

With perfect development policy, prices would still go up, ground rent would continue to be seized by people who had nothing to do with its generated value.

The schools, employers, and natural appeal of SF makes its ground rent high. Landlords did none of that.