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Look at places in the U.S. who have built a lot more housing -- rents and housing prices have gone down.
There's a bunch of available housing in my area, but it's just super expensive. I guess building more might work. My only concern is I only see larger 3+ BR housing or shared housing behind built. The days is affordable 1 to 2 bedroom houses are over. If you want something smaller, you are stuck with condo and high HOAs. Personally, I think they should bring back trailer parks and force ownership to be local.
Trailer parks have the same problem as suburbs of being super low density. They should stack the trailers on top of each other to save space.
Edit: ok I guess what I'm suggesting are those builders' prefabs
Not everyone wants to live in a trailer park.
Smaller housing would need to be subsidized because it costs a lot to build relative to what it could be sold for.