It’s even more fundamental than that. Developers aren’t going to build housing if they can’t sell it for a certain markup, in large part because they can’t get financing unless the project is projected to generate a certain level of profit, which means that new housing only gets built when there’s high demand for it. They will even delay projects when market conditions cool, because there’s no real cost to owning land. The only time they get caught overbuilding is when they’re mid-construction and the market shifts. Even then, these projects are often afflicted with mysterious fires that end up with insurance payouts that cover the developer’s losses. There simply is no mechanism for the private sector to build affordable housing, which is why housing needs to be built, or at least financed, by the state and the housing stock kept in some version of public trust to keep it away from the market. If anyone suggests anything other than that, they are an unserious person.

This is why the NIMBY vs YIMBY debate is stupid and a dangerous distraction. Without decommodification of housing, the problem will persist regardless of how much housing is built.