There’s another reason that local governments don’t embrace intensification, which is that they will be responsible for building the infrastructure to support it. Take a look at Jakarta where zoning laws focus heavily on intensification. Housing is cheap, but power cuts are normal, most of the city smells like sewage because you have sewage flowing into storm water infrastructure, the city regularly floods, and parts of it are sinking into to ocean because unregulated ground water extraction has caused meters worth of subsistence in some areas (the roads are also terrible, but surprisingly the city has been making very good progress in that area at least). Now you can manage all of those things, but it requires competence and proper management of resources. Something local governments tend to not be good at, and why would any of them want to take the risk? Expensive housing and bad traffic is the status quo, flooding you could probably blame on climate change, but power cuts, lack of running water and a city that smells like shit would cost too many people their jobs.
This is easily solved with impact fees. Builders pay a fee in my town of about $30,000 as part of the permit process for a single family home. That money goes towards the necessary infrastructure improvements.
It’s not easily solved at all, because the hard part is planning and building and maintaining the infrastructure. Something local governments frequently reveal themselves incapable of doing, even when they’re sufficiently financed. That’s before you have to contend with the incentives of governance bodies often being not exactly aligned with that outcome. Responsible management of basic services isn’t usually a platform that drives voter engagement. Local governments are incentivised to minimise how much they spend on basic infrastructure, not intentionally create new demand for it.
Unfortunately, it seems like incentives aren't aligned with the people responsible for zoning and regulation, for that to happen.
Incumbent homeowners for whatever reason are better organized at mobilizing around their political interests