Because it sits in a neighborhood that shouldn't exist—not in its current form.

Capitol Hill is the most centrally located neighborhood in the city of Seattle, a leisurely or brisk—take your pick—10 or 15 or 20 minute walk to downtown. It's ridiculous that most of the neighborhood is zoned for single-family homes. Houses on Capitol Hill were affordable during those decades when many/most people didn't want to live in the center of the city and city "leaders" were stupid enough to build urban expressways that made it possible for people to live in the suburbs and commute into the city. (A mistake that led people to believe they're entitled to live in the middle of nowhere and get to downtown Seattle in 15 minutes in a car going 75 miles an hour.) There was no need to rezone Capitol Hill and, oh, upper Queen Anne and all of Wallingford and Fremont back when many/most people didn't want to live in the middle of the city; houses in these close-in neighborhoods were cheap/cheaper/cheapish back then because demand was low. Rezoning was possible then, politically-speaking, but there was no pressing need. There's a pressing need to rezone now but it's no longer possible, politically-speaking, as wealthier and more powerful people have moved into the center of the city.

Want to drive down housing prices in Seattle? Want to piss off rich people and gentrifiers? Rezone all of Capitol Hill (and all or most of Queen Anne, Fremont, Wallingford, and West Seattle, too) for multi-family, multi-story dwellings and other in-city neighborhoods, and bring on the motherfucking canyons...