I think it's not helpful to talk of "government failure" as long as democratic principles are upheld.
You could call it "voter failure" instead. But I'd argue that many of those voters are just acting in their own best interest, because they already own a home and more construction/housing supply does not help them at all.
Some part you might be able to blame on the system, because I'm pretty confident that owners of at least one home are politically overrepresented literally everywhere (just look at home ownership percentages of politicians compared to citizens).
I personally think a lot of this is just the natural consequence of an aging population, where young-people-concerns are basically "underrepresented" by design.
Of course it's helpful, unless one has the ridiculous idea that democracies can't make mistakes.
Yes, voters are acting in their own interests, or at least what they perceive to be their interests at the time. This can lead to bad outcomes. It's why we have things like the Bill of Rights, which restricts what even a majority can impose.
The idea that voters are always right would also seem to eliminate the possibility of arguing for change. Voters are responsible for current policy therefore it must be right, so how could change be good?