I questioned your premise that cities were "designed" to be expensive, whereas I believe they merely "become" expensive through basic laws of supply and demand. The reason cities such as London and San Francisco never grow ever taller skyscrapers is because of planning laws and regulations that restrict supply - not, a free market of supply and demand.

London is a good example of such in that it has ancient viewing rights that restrict the height of nearby buildings, the classic case being that no building can be higher than St. Pauls (a relaxed principle nowadays, but still enforced sometimes). This is a major reason why the old houses in London haven't been knocked down to be replaced by a whole skyline of skyscrapers, but instead are massively expensive properties compared to the rest of the country.

Capital cities are a "premium" product, and they are designed to be so. People pay the premium, because they are effective in the task for which they are designed. Where do you think the "demand" comes from? The demand is for the productivity improvements that can accrue to those who control assets that are highly productive. But note the two words: (1) control; and (2) productive. To extract maximum rents, the product must be under control (so expect a class of laws designed to g;tee this). And secondly, expect a design which caters to high-end productivity (ie, networking, and its corralry...social exclusivity).

If you need to brush up on the history of new york and san francisco as 'financial capitals'.

SF may be a financial capital to some degree, but your comment about VC is still off: they're not based in the city, and they didn't take much interest in companies in the city at all until recently.