I'm living in California and I have this idea for a zoning law: if a residential plot of land sells for more than $X million per acre, it is automatically up zoned to higher density. That way if the market says a location is really valuable more people get to live there.

I've theory-crafted other potential policies like "require any increase in office build density to be matched by increased residential density". That seems more potentially game-able than simply increasing density of properties the market had determined are valuable.