Why can’t new housing reflect the actual cost of materials and labor, with a marginal land value, and existing housing generally increase in land value because

Why can’t new housing reflect the actual cost of materials and labor, with a marginal land value, and existing housing generally increase in land value because it is more desirable? That’s the way it used to work, and many people gained appreciation in their houses simply because of growth. The real underlying problem is a lack of new housing stock, at least partly due to the decade long neglect in the construction trade following the housing bubble collapse.