The bigger question is, why should I create new houses and apartments when I can just raise the rent? It might actually be more profitable for you to have

The bigger question is, why should I create new houses and apartments when I can just raise the rent? It might actually be more profitable for you to have more units of housing at a lower price, than fewer units of housing at a higher price. Profit follows a quadratic formula, and it's quite possible to raise profits dramatically by selling more units at a (slightly) lower price.