>People living together in a small area do get to decide together what they want that area to be like within reason.
This argument ignores 100 years of research in game theory and development economics. No community is an island, okay except Alameda, but even they are a component of a wider metropolis. The way you set zoning laws and transportation infrastructure influences who comes into and passes through your community — no municipality in the core of a metropolitan area can ever truly behave like a single community organizing its residents' lifestyles.
So you see, for example, an attempt to increase the total property value per resident because it leads to a better school district. You see attempts to block new developments and transit stops because relative popularity may transiently increase the local cost of living, even if it benefits the affordability of the metro as a whole. You see militarized police departments who realize they can't outrun crime but they can certainly outrun Emeryville.
None of these are the products of a community of people democratically deciding what kind of lifestyle fits their particular interests. They are the choices of a faction jockeying for status in the desperate power struggle that characterizes the great modern balkanized American Combined Statistical Area.