[c-linkage]

Usually a root-cause analysis asks for five why's so your analysis seems a bit short.

One should ask why it is that housing / land is more profitable than those investments in which banks and private equity previously invested. And then when you follow that line of reasoning (too much capital and credit -- thanks quantitative easing! -- poor performance on bonds due to low interest rates and restrictions on the quality of investment vehicles) and you'll see that the root cause is probably more financial rather than _just_ too little housing.

Debts need to be cleared, losses need to be accepted, and leverage unwound. Building more housing just gives banks and private equity more stuff to buy.

[ProfessorLayton]

That there may be "too much capital and credit" is a red herring because investors won't pour money into assets that aren't lucrative. The main reason housing has been so lucrative is because there's more demand than supply, so building more housing what needs to happen!