It's not really the entire world: See Spain [1]: Until the financial crisis in 2007, the country liberalized building, often quite dense as opposed to plain sprawl. See, for instance, the growth in the towns surrounding Madrid around train stations. The crisis slowed it down massively though, in part because a lot of builders lost their shirts, as the building became massive overbuilding. But when demand goes up enough, it's still possible to build, and build high. In my home town in Spain, people can still afford homes. If there's an issue, it's still just jobs instead.

So yes, this is all something that is politically solvable in the west. We just need a unified legislative recipe, and strong advocacy. Other lobbying groups manage to get through very unpopular legislation. Why not for something that would actually help?

[1] https://fred.stlouisfed.org/series/WSCNDW01ESA470N