The zoning and permitting regulations prevent you from building reasonably on land that you already own. There are plenty of wealthy individuals and developers in San Francisco who would love to tear down two or three shabby Victorian houses to put up a five-story 20-unit condo if they could only get the project approved.
San Francisco in particular makes it extremely easy for neighborhood residents to impede projects that would be automatically approved in any other city [1, 2]. This is why nothing gets built here, it has nothing to do with the cost of land.
No developer can afford to put up with a five-year battle with neighbors who complain about the shadow that the new building will cast onto their back yard, or to pay for fifteen $X0,000 bullshit environmental studies that the city will make the developer conduct as a "compromise." And remember, these are for designs that are completely up to code and that are zoned legally.
No more land can be manufactured, supply is inelastic. In urban areas you are going to have to bid against everyone else and the highest bidder, who agrees to work for the most years for the land, wins.
Rezoning isn't going to fix this IMHO. It might help, but you will reach a limit and then have the same root cause to deal with: rentiers.
I don't think anyone would be using one of these pre-fab buildings for gentrifying existing urban centers. Those development projects usually aim to create aspirational purchases, or investment properties—neither of which wants the taint of "put together from parts, like a trailer-home or something."
No, I imagine these would mostly be used to construct "condo-cities": exurbs/farmland "reformatted" all at once into new urban branch-nodes by plopping five hundred mixed-use condo buildings onto it, and then connecting it to the nearest urban center using high-speed rail or other public transit.
> Those development projects usually aim to create aspirational purchases, or investment properties—neither of which wants the taint of "put together from parts, like a trailer-home or something."
Live in a few of them and you'll see that the level of build quality can be wildly divorced from appearance and sales messaging. :)
So if a building used to cost 400k, broken into 200k land cost and 200k building cost, it will still cost 400k, 300k land cost and 100k building cost.
That's how prices are set. It's not "how much this costs to build plus a fair profit".