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> private companies build homes, not governments. And if it's not profitable to do so, it will simply stop.

> There's an economic downturn and the building of new homes slows down or stops. This happened over here from 2008-2014 creating a massive backlog, in turn leading to a pricing boom in recent years. Ideally, you'd keep building during a downturn but nobody knows how as there's no buyers and it's too big to subsidize.

If the return of demand was predictable then deep-pocketed investors could have kept the building running and made a big profit. Why didn't they? In my experience this is usually down to overregulation one way or another, either rules that make it too hard to invest in housing or because rules that make new homes a lot more expensive than existing ones (e.g. you mentioned energy rules, accessibility requirements, that sort of thing).

If the return of demand wasn't predictable, then stopping building was arguably the correct move.

> Surely the entire western world would not have this problem if it was a simple as a policy change.

The correct policy change is known but counterintuitive and unpopular. (And for many of the voting public it's not seen as a problem; they benefit from rising house prices, so who cares about the young people being priced out?)

The answer is obvious: by investing in supply during a downturn you actively help lower prices, which is the opposite goal of investment.

All trading is like that, that doesn't explain anything. (If that effect was enough to dissuade people from investments, there would be no investments)

> we still can't keep up supply with demand

Are you even sure that this is true? I'm French and I've been hearing the construction sector complaining about too low supply for my entire life to eventually learn in my 30s that we in fact have an ever increasing record number of empty houses…

> One key thing to understand is that private companies build homes, not governments.

You say this as if it was some law of nature, but it's not: states are completely able to build housing, it's just a political decision not to and leave the private sector do the work. And given that we've all been living in a “housing crisis” for post of our life, we can empirically conclude that the private sector is unable to provide enough housing.

> Surely the entire western world would not have this problem if it was a simple as a policy change.

As long as entire western world shares the same political ideology and have the same power structures, there's no wonder they face the same issues. Insanity is doing the same thing over and over and expecting different results

The Netherlands has basically the highest long-term private:public building rate in Europe. Uk is second. Other Western European countries have publicly built units as a higher proportion, so it feels it ought to be possible for the Netherlands government to build more public housing. Doubt it’s necessary though. I expect there might be some kind of public-private middle ground that gets classified differently in NL, but that’s a guess.

So these are few basics reasons why people don't want new houses to be built in their neighbourhood in NL/BE: 1) New houses these days are mostly bought by immigrants, so they don't want to have more immigrants in their neighbourhood than before. 2) It decreases value of their property. 3) Resources get scarce quickly, one friend told me once the new building was sufficiently occupied, their nearest AH/Jumbo couldn't keep up with demand, and it caused very basic issues for all residents until new shops opened up about a year later. 4) More noise due to construction, dust and any other kind small issue. 5) A visual eye-sore, most new construction is tall, unappealing and borderline disgusting as it doesn't fit most post-war neighbourhoods.

As an immigrant myself, I feel disappointed looking at the state of new construction, but also I don't see how the government can fix this. If everyone complains not to build near their home then there are no new places to build houses.

one of the big problems is runaway costs (and not just due to grid upgrades and need for new transport lines, but because construction is still ridiculously labor intensive and undercapitalized), simply put it's at the same time too small scale and complex (and fragmented) to industrialize.

only scale can get the same quality for lower price. but construction happens in small batches. even though the inputs are very similar, there's no aggregate market force pushing down costs (as it's not trivial to substitute local inputs with cheaper ones).

and to get bigger scale folks would need to accept new technologies and of course new building arrangements.

and, obviously, no developed democratic government wants to risk such a big project.