Houses depreciate without frequent and expensive maintenance. It's the land underneath the house that appreciates. In HCOL areas, wealthy people frequently buy residential real estate expecting to tear down the existing house and build a new one.

(There are some limited circumstances where a house can appreciate due to permitting constraints or rapid rises in construction costs, but those are rare and temporary.)

That's a good point and I agree.

But zoning hell can sometimes make it apply to the housing itself too! For example, where I used to live, tons of housing was marked as "historic" and you literally couldn't tear it down or significantly amend it.

It’s also happening everywhere in Western Europe fwiw