mostly because the state has made it illegal or costly to build housing.
The only reason the state would do better is if they can ignore either costs or their own regulation. e
Part of the problem is also the margins to support the top heavy capital class (and the restrictions and permits also favor the capital class). The same reason auto manufacturers put more effort into making expensive luxury cars instead of cheap commuter cars.
Why would someone build cheap houses that would net them the same profit in 10 years as building luxury houses that would in 5 years? Especially if the people on top investing the capital only deal with the accounting books and not actual customers and their desires.
If people could build houses, lots of people would build luxury units until there was no profit in it. Then cheap units would be the most profitable option TO build.
If you only get allowed to build 1 house, of course you will target the best demographic.
You cant lower prices without flooding the market with competing goods.
Why would someone build cheap houses that would net them the same profit in 10 years as building luxury houses that would in 5 years? Especially if the people on top investing the capital only deal with the accounting books and not actual customers and their desires.