It might not be that housing supply causes crime and gang activity as much as oversupply correlates with poor areas. I may be wrong.
To me, this is a far more plausible explanation than housing oversupply itself being the cause of crime.
This created an oversupply of housing in the region. St. Louis doesn't have too many houses because people went to other cities. It has too many houses because people abandoned the housing in the urban core and built new suburbs. That obviously did cause a loss of economic opportunity for the people left behind. But it didn't happen the other way around.
We're just taking turns flipping over the same coin. The people can't move unless you build new houses. Lack of demand for inner-city housing drives an oversupply of total housing units in the region.