Destroy land downtown and put in higher density and more public transport. Put in LVT. Rents and houses will decrease in price. Discretionary income will increase which means taxes can go up but people can actually buy more goods and services. That will grow the job market and the economy and further raise taxes revenue. Then you can also fund things like childcare and paid work leave which will solve the declining birth rate (but I think it should still be below 2 ideally and countries need to deal with that)
There are easy solutions to these problems within the system we have. Nothing extreme needs to be done but they involve governments flexing their muscles and pissing off a few people with money and power (including the people in government making money off this system)
What will actually happen is governments will rather let the whole system collapse in on itself and will increase immigration which will keep house prices high and wages low.