The core problem, which causes that shortage, is that we have conflicting views on what housing is for.
On one hand, we want housing to be a right. On the other hand we want our houses to be good investments.
Those are conflicting goals. We need to pick one and be ready to sacrifice the other.
If you want your house to be a good investment, it needs to appreciate in value at a rate higher than inflation. The only way for that to happen is if housing keeps getting more expensive on a real money basis. That’s a fancy way of saying that housing will be a bigger and bigger chunk of income.
Every single policy that reduces the cost of housing also degrades its effectiveness as an investment. If people can get housing any time they want, they have no incentive to pay somebody a bunch of money to someone hoping to fund their retirement by downsizing.
Your suggesting to legalize more housing will destroy the ability of homeowners to make a profit off their homes. Even though I stand to earn huge amounts of money from the appreciation of my own house I would support that, but I’m afraid I’m in the minority. The US has a 65.9% home ownership rate and for most people their home is their single biggest asset. If we address the housing shortage those people will all see their single biggest investment asset drop in value.