I agree, but probably not for the reasons you've arrived at that conclusion. IMO a land value tax makes a lot of sense! Restrictive zoning, on the other hand, has the opposite effect(and the results you described above)
Classically this takes form of a tax on unused land with the idea being that land shouldn't be an investment in its own right so that the above image doesn't happen.
IMO the ideal vision would be no other taxes associated with property(and probably a lot less of other taxes, as well), replaced solely by a Land Value Tax.
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It needs to government to stop it from being an investment opportunity.