"The key is increasing supply" assumes the goal of new housing laws should be to increase supply and bring house prices down. But a lot of people do not agree with that goal. Many people are homeowners who will get tens of thousands of dollars richer if there is less supply and prices rise. And in America at least, homeowners have more votes than renters or builders or landlords or the homeless or other groups. So new housing law tends to favor the goals of homeowners, not the goals of other groups who want more supply.