Well, letting people build houses right next to freeways and/or on things like earthquake faults or flood plains is what is being done here. Which is, uh, also a problem. Since those people are now at much higher risk, eh?

Building on farmland has national security concerns (as countries are slowly realizing), as the country ends up dependent on foreign food imports after awhile. Can't grow food effectively when there is a subdivision there instead eh?

In most high demand areas (which are the ones everyone is complaining about, generally), all the decent land (or even just 'normal' land) is already developed.

Bonus - next time around, even the flood plain land might be 'too expensive' to develop on, and folks will only be able to afford houses at the dump, or in a swamp, or the like. Yay.