Profit is a function of materials, land, labor, margin, and very much regulatory cost. When town laws limit the height you can build, that means you have fewer

Profit is a function of materials, land, labor, margin, and very much regulatory cost. When town laws limit the height you can build, that means you have fewer units to distribute total costs across. Building 10 stories might be 70% the cost of 20 stories… so if you have double the units to spread things across, price per unit WILL be lower. Now extrapolate for things like 1. Minimum square footage 2. Parking requirements 3. "low income housing" units or other terms the local housing authority might put on top of any deal 4. Getting approval for the design (and the cycle of going back and forth to the drawing board) 5. Buying out surrounding rights holders like that old church you have to move across the street, or in SF's case the derelict gas station that is now a landmark if it means "preserving the character of the neighborhood" 6…etc Building is anything but easy or cheap: https://www.youtube.com/watch?v=ExgxwKnH8y4 https://www.youtube.com/watch?v=ExgxwKnH8y4 All this adds up. Public housing is important in the interim given its usually easier to get around existing regulations, but the government is one of the shittiest landlords around. The goal should be 100% private housing supply. Market based solutions will absolutely build homes for the homeless as long as the cost to build them do not exceed the value that whatever entity like the government or charity can pay. Markets deliver $8 Waffle House steak, and $60 Ruth's Chris steak. Cities/regulations only allow Ruth's Chris. You get luxury housing b/c it's too expensive to build anything else. Fortunately even new luxury stock is good, as it frees up formerly luxury housing stock and stabilizes pricing for less-nice housing elsewhere. It's pretty basic Econ 101.