I agree with the absurdity of what you're describe but: (1) development is not in the hands of the people in the Bay Area; (2) there has been a multiple decades effort (which I'm sure you're probably more aware of than I am) to cap multi-family housing development and density in the Bay, and instead when housing is built to focus on pricey luxury housing; (3) suburbs and sprawl are part of the issue that needs to be addressed in (what I would argue would be a bottom-up overhaul), but you're right about the idea of a punishment mechanism.
The U.S. development patterns are in for a world of hurt as the decades grind on.
