You can't keep up with demand until the amount of housing (and thus people) is so high that the place becomes miserable enough that people start rejecting it.

You can't keep up with demand until the amount of housing (and thus people) is so high that the place becomes miserable enough that people start rejecting it. Different people have different thresholds of misery. Consider that people live in Manila, Mumbai, Guangzhou, and Dhaka. People even used to live in Kowloon Walled City, which looked like something out of the movie Bladerunner or maybe Soylent Green. That is what you'd get.