While some comments have pointed out that the population has increased, that doesn't actually matter. Because what's being discussed here is an increase in demand for housing in a specific city.
Even if the country's population stayed the same, an increase of people wanting to move to Santa Cruz will drive up demand for housing in Santa Cruz. When you have sustained increases in demand over multiple decades but local governments that block any and all attempts at constructing housing supply to match, you get the ballooning prices you see now. That there is plenty of housing supply in Nowheresville, Nebraska is of little use to the people who can't afford to live in Santa Cruz.
THIS. Housing is very local. Even within a city or metropolitan area, you can have areas which have increased demand.
Not to mention the other factors such as compounding of population growth, short-term rentals, housing stock being destroyed or serving fewer people than before (widows, empty nesters.)
Even if the country's population stayed the same, an increase of people wanting to move to Santa Cruz will drive up demand for housing in Santa Cruz. When you have sustained increases in demand over multiple decades but local governments that block any and all attempts at constructing housing supply to match, you get the ballooning prices you see now. That there is plenty of housing supply in Nowheresville, Nebraska is of little use to the people who can't afford to live in Santa Cruz.