We become a very expensive place. Wages and housing prices increase. Companies that move here do not find the workers they need. A mismatch occurs between the movement of capital and jobs and the inability of the state to easily and effectively provide housing, real estate and workers to fill those jobs. The answer is governments are not rational.
Governments are political entities, and respond to consumers and businesses.
Businesses cannot say 'no' to government. Consumers, in general, are no better. It is the same process. Once you understand political economy, you will understand why we have programs that make no sense. The appropriate direct role for state government to play in economic development is to manage the increase of long-term wealth for residents of the Commonwealth.