You’re fighting a straw man, nobody is arguing you need to do what Japan did verbatim. The only argument I’m making is when you allow supply and demand to meet prices stop going up. All the rest is narrative.

The answer to where is “up.”

That is not at all reflective of reality.

https://japanpropertycentral.com/tag/tokyo-apartment-prices/

Tokyo prices are running 908k yen/square meter, or $685 square foot. While manhattan real estate is $1.5k/sq Ft and San Francisco $1k/sq ft - median incomes are dramatically lower in Japan, as is purchasing power, with the median Tokyo income being only $66k/yr.

There is a reason the stereotypical apartment in Tokyo is tiny - on average 65 square meters (700 square feet), of which only 41 square meters (441 square feet) is livable space.

That’s often for more than one person.

Outside of Tokyo, property is nearly free. Inside Tokyo it’s expensive, crowded, and tiny.

Looking at the national stats, it roughly averages out.

But that isn’t this utopia you seem to think is occurring.

So at $685 (1/3 of Manhattan and 1/2 of SF) the units are also somewhat smaller. Sounds pretty darn affordable. Meanwhile in SF if you can’t afford the units that are larger by regulation you can live 2h outside of town. The whole point is folks can live in the metro, and live well. And despite that prices haven’t changed in nominal terms in 30 years.

You've skipped over the criticism.

Put a billion houses on Jupiter, and their value will be zero, while new york remains expensive

But if you put a billion houses on Manhattan their value will be zero. There's almost an unlimited amount you can build up. The problem is we're currently putting houses on Jupiter instead of Manhattan through arbitrary restrictions on density.

If you put a billion houses on Manhattan, MOST of those billion houses would be worth nothing, and the ones where people wanted to be (which is probably not Manhattan if a billion houses were blocking out the light - but I digress) would still be expensive.