Yeah this is the biggest issue.

The way most housing gets built where I live it works like this: A company handles the project management, buying the land, getting the permits, hiring the builders, doing the marketing/sales etc. This costs a HUGE amount of money, which they don’t have. So these projects get designed on paper and then sold to investors. These put in a big amount of money, with the expectation of the project making money in the sales of the housing in the end. This means they can often double their entry in a couple of years, which is really good in terms of investments. As the investors want to make as much money as possible, the company designing the housing have incentives to not only make the houses as dense as possible, but also as expensive as possible. Their margins in percent are about the same no matter the house, so a more expensive house makes them more money. This leads to really big expensive homes crammed together in either high rises or plots. It’s really dumb as well since detached homes are worth more, they build homes with like 2 meter between them. The biggest issue is, only rich people can afford these homes. Even though more homes are built, the majority of people looking to buy a home can’t afford these. Homes also get sold to investors again, to rent out as the house itself appreciates in value. These expensive homes also have the effect of driving up property prices in the area, which leads to more expensive houses and higher taxes.

In the end, it’s only the rich that profit. They get the good investment projects, making them even more rich. They get to buy the expensive new homes to live in. They get to buy the homes to rent out and use as an investment vehicle.

Some places have made them build cheaper homes as well, if they want to get the permit. But it’s not enough. We need to be building practical affordable homes, but we don’t cause the people putting up the money to build stuff don’t want to.