I don't accept the premise. Vancouver sure looks a lot different than it did 30 years ago, right? Well, certainly the peninsula/downtown does, but most of the city is still zoned for single-family housing:
Even Vancouver isn't building anywhere near what the demand would support. If people were allowed to build more housing in Vancouver, then they would. [0]
In general, people's intuition on this stuff isn't great, for a few different reasons:
1. Status quo bias. Any change tends to look like a lot of change. This is the, "I can see three cranes from where I'm standing, so we must be in a construction boom" fallacy.
2. Illusion that concentrated change indicates widespread change. People see a lot of development in one part of town and discount that such development is prohibited in 98% of the city. (This one definitely applies to Vancouver.)
3. Failure to account for proportionality. If somebody hears that a city added 5000 units, they'll probably think that's a lot. But is it? What if we're talking about a metro area with 10 million people? It's nothing. Big numbers can end up being small numbers when the scale is large enough.
3. Failure to account for growth in demand/population. We build fewer houses than we did 100 years ago, but we also have many times as many people! So even a static supply is bad, because you have to at least build enough to keep up with growth. And since some cities have seen a sustained surge in demand for the last 2 or 3 decades without enough construction, even seemingly large amounts of recent development might mean that you're still way behind.
[0] I'm aware that Vancouver has made some progress on this. I think they're going to start allowing more duplexes and more housing near SkyTrain stops. I don't follow Vancouver that closely, so I'll just note that I'm aware it's changing.
Vancouver is the 4th densest city in North America (> 250k people). They have plenty of multi-story condos/apartment buildings, they also had these 30 years ago (as a kid growing up in Seattle, I would always marvel at how dense Vancouver was compared to our city in the south). So while sure, Vancouver could become even more dense until speculators had enough of the market (same thing happened in the late 1980s during the Japanese bubble, Vancouver got burned for it in the 90s), they are already doing plenty well comparatively.
I'm I guess what you would call a supply and demand absolutist. There's no "correct" amount of development or "optimal" level of density (wrt prices, I mean; obviously people have preferences). If you let demand outpace supply, then you should expect the available market-rate housing to increase in price. (And that's true even if you think your city is building a lot, or if you think it's already really dense, or if you think it already has a lot of people and big buildings, and so on.)
There are limits to how many people land can carry. Vancouver builds up onto a mountain, which is crazy. Yes, for some price, we could terrace the mountain or even remove it.
Vancouver is a boom bust town for real estate, now it is in a boom, it will bust eventually, just like it has many times before. There is just too much speculation going on to represent stable demand.
This is the difference between constrained and unconstrained areas. For example, San Francisco is a constrained area since it's already bounded by other cities and can only increase housing by building higher or getting rid of parks.
But the San Francisco bay is quite unconstrained, with extremely low population density and massive undeveloped tracts all over. Here, only regulation and laws prevent the cities from becoming bigger.
In general, the vast majority of people live in unconstrained areas, not constrained areas. But because constrained areas are where you get the windfall wealth from housing, people in the physically unconstrained areas clamor to make themselves legally a constrained area by making it illegal for the city to grow out.
So yes, there are limits, but these are political limits, not physical or environmental limits, and they are driven by incumbent owners with dollar signs in their eyes, not concern over nature.
Sorry to have to keep disagreeing, but we are nowhere near any geological limits in Vancouver. As I pointed out above, most of the city is still composed of single-family homes. It's not just that it's not all massive towers. It's not even duplexes or quad-plexes or small apt complexes. It's low-rise bungalows on single-family-only lots.
There's tons of space in the Vancouver metro to add density. The issue is that it's illegal.
http://www.datalabto.ca/wp-content/uploads/2019/07/thumb_nai...
Even Vancouver isn't building anywhere near what the demand would support. If people were allowed to build more housing in Vancouver, then they would. [0]
In general, people's intuition on this stuff isn't great, for a few different reasons:
1. Status quo bias. Any change tends to look like a lot of change. This is the, "I can see three cranes from where I'm standing, so we must be in a construction boom" fallacy.
2. Illusion that concentrated change indicates widespread change. People see a lot of development in one part of town and discount that such development is prohibited in 98% of the city. (This one definitely applies to Vancouver.)
3. Failure to account for proportionality. If somebody hears that a city added 5000 units, they'll probably think that's a lot. But is it? What if we're talking about a metro area with 10 million people? It's nothing. Big numbers can end up being small numbers when the scale is large enough.
3. Failure to account for growth in demand/population. We build fewer houses than we did 100 years ago, but we also have many times as many people! So even a static supply is bad, because you have to at least build enough to keep up with growth. And since some cities have seen a sustained surge in demand for the last 2 or 3 decades without enough construction, even seemingly large amounts of recent development might mean that you're still way behind.
[0] I'm aware that Vancouver has made some progress on this. I think they're going to start allowing more duplexes and more housing near SkyTrain stops. I don't follow Vancouver that closely, so I'll just note that I'm aware it's changing.