https://en.wikipedia.org/wiki/Network_effect

Are there more housing units in Manhattan or Dubuque?

Which one has more expensive housing units?

Part of the purpose of development is to make more shit happen and increase demand. It's rarely just "new increaesed supply vs constant demand"

Or rather: a demand that would result in anyone producing new housing units does not happen in a vacuum. And outpacing that rate of demand rarely happens from construction alone.