It will be a very, very long time before we run out of usable land in this country. The problem really is that 50% of the population wants to live on the same 0.1% of land.

The saying can apply to any arbitrary area of land. It doesn't necessarily mean the entire Earth.

Ever since humanity started being able to build upward, I'm not sure this is so relevant. There's more than enough developed land to comfortably house the human race. We're just using it comically inefficiently.

Let's saying the average human values shelter at $X. Even if it were always possible to arbitrarily build upwards, it still makes sense to buy land because the value of the land would be $X * number of people who want to live on the land. As long as the number of people who want to live on your land keeps growing, as seems to be the case in Santa Cruz, it makes sense to own land.

And of course, once you own the land, you may decide that maybe you don't want so many people around. The value of your land is based on desirability, not the actual density, after all. So instead of building an arbitrarily tall building, you band together with the other land owners and implement something called zoning that restricts how high buildings can be.

I'm not making a moral claim that this is right or wrong. I'm simply pointing out that this incentive structure is inherent to land ownership in our country.

I'm not disagreeing that land can be a good investment for that reason (though psychically knowing which bits of land will increase in desirability in the future is not trivial).

I _am_ disagreeing with your assertion that "there is a certain amount of delusion in expecting any static resource to meet monotonically increasing amounts of demand". Increasing the efficiency with which you use a resource is, in fact, an excellent way to make a static resource meet an increasing amount of demand.

> instead of building an arbitrarily tall building, you band together with the other land owners and implement something called zoning that restricts how high buildings can be

AFAIK this isn't the actual origin of restrictive American zoning policy, but yes I see your point. However, effective NIMBYism requires that small groups of zealous locals be able to control construction in the first place. If zoning policy was restructured to be controlled primarily by the federal or state government, it would be impossible for local councils to zone away dense construction the way they do now. Japan is a practical example of a country that does zoning in exactly this way.