The zoning argument is such a myopic perspective on the problem. The issue with housing affordability is across many communities, most of which have no issues with shortages of buildable land nor even shortages of housing. The primary impact on prices is from the demand side due to cheap credit from artificially low interest rates and speculation by large investors and small time speculators moving into real estate.
Virtually every city other than a few that are essentially islands or peninsulas that are fully built out like San Francisco and New York City. Some examples of cities with plenty of residential buildable land to expand into in the United States are Houston, Dallas, Austin, San Antonio, Tulsa, Atlanta, Charlotte, Orlando, Tampa (ex Saint Pete which is a peninsula), Jacksonville, Fort Meyers, San Diego, Los Angeles, Bakersfield, Sacramento, Las Vegas, Phoenix, Baltimore, Richmond, Greenville, Nashville, Knoxville, Chattanooga, and a myriad of other cities.
I already explained why prices go up when there is sufficient supply: hyper-fueled demand from essentially free money and new entrants like hedge funds looking for ways to invest the loads of cash they can borrow for nothing and money from their investors as well. In many cities, more than 30% of all home purchases were from investors.
Because real estate works somewhat similar to ponzi scheme because of low liquidity and lag in the transaction settlement. Everyone wants higher return one over the other on each sale and it ends up in speculation loop.
The price rises without new increase in the supply, because you would not lock-in to a particular house on just your first visit. So, each of these visits from each person constitutes each time to total demand. And demand gets a bit inflated. Speculative nature of real estate on top of that, encourages the sellers to hoard with higher prices (like a synthetic monopoly mindset).
Even if one buyer locks into a higher price, the effective market rate goes up because every seller in that area expects much higher price than that.
Price based on Supply and Demand only work properly in a Open Market with High Liquidity.
