I think you are conflating a number of factors. Increasing the supply of a good, when all other things are equal, decreases the price. Austin TX is a good example.

If increasing the amount and density of housing increases the desirability of a place thus increasing the value of the housing, this still has limits.

The SF bay area has had a housing shortage for 30 years. Its driven by people wanting to move in that have lots of money AND the refusal of local cities to allow housing to be built, also there isnt new land to build on. However the number of vacant plots in Mountain View is disgraceful.

If we allowed people to build high-rise apartments in downtown Mountain View rent would drop.