I am of the opinion that most “supply” issues are due to investors. Except in certain geographic areas we do not have a shortage of actual physical housing. What we have is a shortage of available housing at a mixed pricepoints for purchase.
All housing that investors purchase for rentals removes it from the supply.
Traditionally investors have sought out entry level housing for rent. They invest in building rental complexes. They make all cash purchases and then rent it out to people who otherwise would have been first-time homebuyers. Investors used to be the low end offer. Blatant price fixing has increased rent outrageously. Now investors are the high end offer and removing supply constantly.
With AirB&B, the middle and even upper range market that traditionally has had less investor competition is now a major target. This has led to price wars for investment purposes on previously safe segments.
The first solution to the housing supply is simple: taxing income from rent so that selling the property is financially more lucrative. It will have to include a prohibition against rental increases to cover the taxes as well.
The second is to mandate zoning and new construction to match the market needs not the needs of the investors.
Last would be to create a program where builders who focus on entry level housing receive incentives from governments (also include hefty penalty for substandard construction).