> Developers build what's profitable, i.e. what's in demand.
This is only true to the extent that regulations don’t constrain the developers. As I understand it, in much of the US, regulations make it very difficult to build high density family housing.
There is plenty of opportunity to build high density family housing legally, even despite current regulations.
What’s not as easy is to build it as quickly and profitably as high-margin single families for end-users in the suburbs. High-density buildings for landlords are sold to relative experts in real estate who know their numbers. Low-density luxury-appearing houses can be sold to end users who don’t know their numbers as well and who are spending partly on their dreams and emotions.
(I say this as someone who bought two houses as an end-user and I mean no disrespect to end-user, non-expert buyers.)
> As I understand it, in much of the US, regulations make it very difficult to build high density family housing.
Absolutely they do, but the 1-bedroom and studio units are the things those rules prohibit. Which is why they're in demand anywhere they're actually allowed and why developers start building them anywhere you remove the constraint.
This is only true to the extent that regulations don’t constrain the developers. As I understand it, in much of the US, regulations make it very difficult to build high density family housing.