The physical barrier of the San Francisco Bay prevents Berkeley (or Oakland) from feeling much like the "backyard" of San Francisco. If you randomly teleported Berkeley to Portland or Seattle, with a similar degree of geographic isolation (stick it out past Mt. Pleasant, or on Bainbridge Island), it'd very likely chug along doing its own Berkeley thing. Put it next to Dallas and things wouldn't be pretty.

Anyway, since when has SF government "functioned", especially with regards to housing? Maybe a flashback to 1995 will help answer that question: https://www.sfgate.com/news/article/Housing-shortage-worsening-3132731.php