Yes, it's already turning into a ghost town. It's not just the housing rules, though - there's more:

- the Green Belt which prevents any outward expansion

- shadow taxes of up to 800% of construction price

- awful road system so you can't commute to the city by car, unlike most American cities

- mediocre intercity train system so you can't commute to the city by train easily, unlike most European cities

They do have the Eurostar high-speed train to France. Lille, through which all trains to Brussels and Paris go through, now also has a surge of gentrification because it's only 80 minutes with a high-speed train. Never mind the fact that it's in another country on the other side of the Canal.