This article presents as some great revelation that restricting supply causes prices to increase, when such is the logical outcome of restrictions on expansion.  In placing such restrictions, people have inherently chosen to limit housing choices as part of the trade-off.  We are probably at the point where city dwellers will start raising families in apartment buildings.  It's hardly a horror--most of the world does it just fine.  It's the tradeoff we accepted in exchange for the downside of unending sprawl (go visit most US cities, where endless commutes to ever-distant, bland bedroom communities is widespread).  Essentially, we've picked our poison.