Housing is expensive because of lack of housing supply and because of high housing demand because of both soft (non-finance-driven) desirability conditions and a sufficient concentration of very-high-income, price insensitive buyers on prices.

Everything else is so expensive because of the second of those reasons, plus everyone having higher salary demands because of high housing prices.

Increasing housing supply can mitigate the problem somewhat, but the other drivers of cost will still remain, and I Think most people would agree you don't actually want to deal with the other cost drivers to aggressively. I mean, even dealing with the high-income-earners-as-cost-drivers problem softly by raising high-end marginal tax rates somewhat is a a highly controversial position.

Just because of supply/demand alone? If sitting in a comfy office pays as well as it does, why would people take care of children or build houses for way less?

I think this is just Baumols cost disease in action: you really cant have amazingly well paying jobs (like in SF generally) AND super low paid laborers without some kind of class system/feudalism/etc.