But, we have such a supply problem (in popular US metro areas) that prices continue to go up, even when we add capacity.
In my immediate area, there is very little SFH stock being added - it's almost exclusively large THs and rental apartments (but not condos).
The apartments rent for "luxury" prices ($2500-$3500+/month) but are just generic 1-2 bedroom flats without any true luxury features.
The THs are "near-luxury" - better than "builder grade" finishes, but nothing special either. And sell for $800-$1.2 million (for a typical 3-bed, 1-2 garage, 2500sqft floorplan).
pre-covid, the San Francisco greater Bay Area had a quantified dwelling unit (DU) shortage of around 500,000 units. Those numbers are directly connected to jobs available and other demographic factors.
The other issue you have (which confuses the situation) is there may be a 500k shortage in the Bay Area directly (e.g., people who work in the area and would like to live closer, etc, etc).
But if you solve that you may find that you have an additional five million families far from the area, out of state, even out of country that would also like to live there. At some point you can't satisfy everyone, or the Bay Area wouldn't be the Bay Area anymore and it would more resemble New York West.
hypothetical nonsense -- whole cities in California cannot attract new Doctors or uniform police because the person working cannot afford RENT. public school teachers have been priced out of RENT for more than a decade. The ability to purchase a home comes only after personal capital is accumulated for most people. A recent study showed in California that in many areas, household income must be FIVE HUNDRED THOUSAND per YEAR documented income to purchase an ordinary home. This housing system is top-loaded with capital for twenty years now.
nonsense like "oh maybe another five million would want to come here" is not only distracting, but bordering on cruel denial.
It seems to me that if one luxury condo takes the space and building cost of multiple smaller units, then building luxury condos could prevent a sufficient number being built.
