One of the disconnects here is that the demand is not uniform. There is demand on housing from people who live here and want to continue to live here. There is also demand on housing from people who want to invest and make money. I believe that the second category has actually been the major driving force of housing prices. Yes one thing we could do is bulldoze the city and build thousands of condo-towers, and maybe we'd drown the demand from investors and actually succeed in bringing down the prices. Or maybe we could just kneecap housing investors, and not have to terraform our city into a dystopian hellscape to please the market.