Elasticity of demand is the elephant in the room for build-more-housing advocates. Let's say NYC's mayor rubbed a genie's lamp and wished to double the city's housing supply overnight. Yes, rental and real estate prices would crash through the floor due to the glut of supply. But then millions of people would move to the city and buy up all that supply.
This would rapidly double the population of the city which would cause tons of businesses to move there to hire everyone and then commercial real estate would skyrocket. At the end of the day, the city would be twice as large and more overcrowded than ever. Sure, they'd be more efficient in terms of infrastructure (plumbing, electricity, transit) but rents would skyrocket to capture that extra efficiency for landlords.
This would rapidly double the population of the city which would cause tons of businesses to move there to hire everyone and then commercial real estate would skyrocket. At the end of the day, the city would be twice as large and more overcrowded than ever. Sure, they'd be more efficient in terms of infrastructure (plumbing, electricity, transit) but rents would skyrocket to capture that extra efficiency for landlords.