I think you've provided exactly 1/2 of the answer why housing is expensive. The other half of the answer is that (in short) we've created a set of legal struct

I think you've provided exactly 1/2 of the answer why housing is expensive. The other half of the answer is that (in short) we've created a set of legal structures to prevent land owners from building the amount of housing that the market would otherwise build on their own land. The scarcity, and thus value, comes from excluding people.