I wonder about this argument. I think that Millennials want to stay in the core. They are willing to give up backyards and garages and whatever, even when they raise families. They are used to life without cars. They walk and they bike. They want walkability to amenities. These are the ideals with which they grew up. These are not people who live in 400 sf boxes in City Place and then want to give up city life for commuting just so they can have badly-built "nice single family homes with no fees." They are used to highrise life. They are used to compact living. They may not want to garden and shovel. They are happy with parks. They are paying $900K-plus for sh-tboxes in Riverdale that needs lots more in maintenance than in monthly condo fees. So I am confident that, if you build them decent family-sized and well-located condos, they will come.Let's be honest, demand for 3 bedrooms is small, which is the only reason not many of them are being built. At Y/E, at 550/sf, a 1200sf three bedroom will cost $660K, plus $40-50K for a parking spot; assuming $0.5/sf condo fee, monthly condo fee is a whopping $600 a month, to be escalated 3-5% a year. Let's ask ourselves, how many of us here are willing to buy these units, instead of a $700k nice single family house with no fees a bit farther away from the core?
San Francisco is surrounded by water on three sides limiting the amount of room for development. Chicago can sprawl all the way to Kansas City if it wants.San Francisco is another example where supply of housing has been restricted, resulting in very unaffordable prices. On the other hand, cities like Chicago have been pro-development, which has kept housing price quite affordable (no it is not because Chicago is less desirable, it has a massive population).