Regs are things that are never on the menu. There's always a competing incentive: That sweet, sweet property tax revenue that scales as a function of property value. Therefore, we can't do anything to bring down the cost housing - instead, the answer is to increase density. Never mind that infra built around the turn of the last century often can't handle it.

I don't think that regulatory changes are never on the menu. There's a pretty lively, and somewhat successful, YIMBY movement that's made some strides nationally. Particularly in California, where the state has started pre-empting local governments and forcing them to approve more dwelling units. My firm has a sizable California land use and zoning presence, and I was able to speak with a lot of my colleagues from there at our last national meeting. These laws are starting to have modest impact - the local governments are pissed about it, but they're losing most of the litigation and are being forced to approve significant new projects.

Although this manifests in blue states, the NIMBY problem on the regulatory side is most often from the more conservative parts of those blue states - for exactly the reason you describe above. The biggest opposition to more housing is almost always existing homeowners. That's the owner side of the property valuation dilemma that you mention on the tax side, but is also really important to the owners as well. And homeowners are significantly more conservative and more Republican than the electorate at large. So what happens is the political opposition to regulatory changes comes mostly from the more Republican part of these blue areas, even though Republicans are ostensibly the party of free markets. That's why Staten Island (for example) tends to lead the fight against NYC housing expansion efforts, while the main opposition to California's YIMBY efforts comes from conservative cities like Huntington Beach, Yorba Linda, or the Inland Empire municipalities.

Trust me, regulatory change has been a massive topic of conversation even in blue states and blue areas of red states (like my own Miami-Dade County, which did a massive county-wide upzoning with their SMART Plan a little while back). However, there's always huge resistance to it - and most YIMBY efforts have been throttled. You have "death by amendment," where the YIMBY coalition ends up having to seriously pare back the changes to counter political opposition (again, mostly from conservative areas). But let's be honest - you also have the "everything bagel" problem on the progressive side, as well as progressives fiercely protecting their own sacred cows (like environmental review statutes and historic preservation laws) that end up getting in the way. Plus, these reforms started getting implemented just as construction costs and interest rates began to rise, so they're only having limited impact right now.

But it's assuredly not the case that regulatory reform is never discussed, or indeed never adopted. But as others have learned when trying to rip out various governmental features, almost everything in government has a constituency that deeply wants it - and usually not only for philosophical reasons, but because their interests are directly at stake.