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Why? Vacancy rates are near all-time lows in California’s major cities. Most cities are around 2-4% vacancy whereas you need about 10% vacancy to operate a healthy market.

If that were the case, shouldn’t supply/demand fix it? That is, available housing would get cheaper if not being utilized, right?

Unless rent control happens and only a tiny fraction of the apartments are at market rate. If that's the case the messed up portion of the market will just keep exploding.

Who said that those units aren't used? It's just that they cost is so high, that bigger and bigger portion of the population can't afford it anymore.

It doesn't help that foreign investors also purchase the property and either don't rent it (afraid it will reduce its value) or use it for AirB&B. That causes the supply to go even lower and prices go higher.

That's essentially the same thing. Not enough housing supply will have the predictable effect of increased rents that will price some out of the market.

Housing is too expensive because not enough is available.

Houses are not too expensive, there is just too many people searching for a house.