This an artefact of lobbying by the building industry who can absolutely rake in profits building luxury housing but are restricted in terms of where they can do it.
It will absolutely nothing for the supply of affordable housing unless luxury housing is taxed to death and building affordable housing is engineered to be profitable, but they'll fight that tooth and nail. Nobody exchanges 16% profit margins for 4% willingly.
It might even make things worse if the stripped regulations are about mandating % of affordable homes in new developments (which theyd fucking LOVE) and it will probably ensure quality goes down the tubes.
Only public housing will actually solve the supply issue. Singapore is the best model here.