The system is adjusted not by nefarious, moustache-twirling bastards, but by the actions of other people buying goods and services, including housing, up to the point where they believe their outcomes are optimized.

If lots of people want to live in a particular area because they think it will help them live better, that area will have more people jockeying/bidding to live there. Since everyone wants food with their meals, food will get bid up. If vacations to a beach are enjoyable people will vie for them (and suppliers emerge to cater to that).

The treadmill effect is caused because other people are running their own lives on their own treadmills, resulting in a system outcome.

That is part of what gives rise to the FIRE movement among people with some freedom to choose to live on less than their max (not everyone can, and certainly not to the same degree). If you adjust the hedonic consumption treadmill to run more slowly than you are running, you can literally get ahead. I’m not choosing it, instead choosing the expensive mortgage and longer worker career, but I can see why it appeals to some.