[aianus]

Or:

3) Agree to high-density rezoning, endure the construction noises and shadows and whatnot for a couple of years, then sell your house to a condo developer for a massive profit and never have to work again.

This isn't a hypothetical, I saw it happen on the street I lived on in college. The detached houses fell like dominos and were all replaced by high-rises until there were none left.

[snrplfth]

Sure, if you want to sell. But if only some of the people want to sell, then the problem of non-compensated externalities arises again. It's a classic collective action problem arising mostly from the fact that things like air rights, street space, and so on, are barely tradable.