Lots of people want to live in an urban setting. Build more urban neighborhoods, everywhere.
Also, this book, although it's pretty high level: http://amzn.to/1qsn2RD
I think this is one of the most important issues in this day and age. It's happening everywhere, and things need to change.
Edit: downvoters, care to actually state your opinions? I'm hardly a libertarian, and neither is Matt Yglesias, author of the aforementioned book. I don't think 'free markets' are the answer to all the world's problems. But I do think a more liberalized market would help housing a lot. These areas need more supply, and if you don't want LA style sprawl, the best way to do that is via density. And the best way to accomplish that is probably by letting the market work, within reason: I don't suppose I'd be in favor of allowing an outdoor thrash metal venue in the midst of an otherwise quiet neighborhood, but there are a lot of things you could add to make places more livable and walkable without cars.
Where I live people don't leave any room for parking on their own property and all of the streets are completely jammed with cars, every inch. You don't hardly dare move your car if you've been able to find a spot.
Is that freer?
Parking your car costs money. People should pay to use it if they need it, but the rest of us shouldn't have to. Right now, drivers are subsidized.
We need to regulate good design that leads to compact and efficient communities instead.
My fear with less regulations is that while you could see taller, and denser buildings in some areas, you'd also open up the potential for an increase in sprawl, as lazy developers chasing profits would equally be allowed to build low density sprawl if there was an incentive to.
The local example of this is that in Metro Vancouver it is basically now impossible to build a typical suburban mall. No city will allow it because it's a terrible idea from an urban design and planning point of view. However, two malls have recently been built nonetheless! This happened because the developers found land near the airport and on First Nations land that was outside the jurisdiction of local government, and they could build whatever they wanted with little to no oversight.
Deregulation within an urban growth boundary. I don't like sprawl either. Houston or LA are not my ideas of "the answer", although Houston does - apparently - get some deregulation right within the city as well.
One of the reasons rents are getting up there is fewer people driving and not a ton of options on where to live if you don't. I'm in Boston and simple little stuff like an extension of the subway can't get off the ground due to mismanagement and lack of funding.