Having lived in London I am starting to wonder if really large cities aren’t going to suffer under overcrowding and increased housing prices to the point where it very painfully (maybe) self regulates?
It already does. Far more people would live in the desireable areas of London and Manhattan, among others, if the housing were available at half the current prices. The effects in the greater Metro areas are less—people trade off commute time for lower prices/more space—but people still absolutely factor in CoL when making location choices. I certainly would never consider a number of areas for that reason.