[jlousa]

If your suburban towers are all 100 floors, and your Shangri-la was 325 floors, this is what would happen. the Cost per floor (your estimates are on the low side, very low) would stay the same, lets say $350psf. The problem is the demand side is not there to absorb these 100 story towers at $400psf, you would have to limit supply until there were enough people willing to pay that $400psf, that's the situation we are in today.

If you opened the floodgates it would crash the market as the amount of product that would enter would bring the prices down below what it would cost to make it. The market does a pretty good job in the long run of controlling supply/demand. Trying to regulate because of short term effects usually screws up the market more, it should be left to it's devices.