In my region of the world they enable having any sort of housing at all. Plenty of people don't have the credit score to buy anything livable within city limits, so they resort to buying apartments in the suburbs and small, adjacent cities.
Public transport hasn't caught up because these places developed too fast and even though their inhabitants live and pay taxes there, the businesses they work for don't, so the tax base is all the lower due to that.
Your point is valid, but the lack of affordable housing in your city is most likely due to the lifestyles that cars allow us to live. Single family homes and parking lots as far as the eye can see.