"Induced demand" leads to wrong conclusions in general, analogous to confusing the local maxima produced by a hill climbing algorithm with a global one.

It's possible to build enough of anything to satisfy all the demand, even roads. The real problem with roads is the opportunity cost. There are alternative, better ways of satisfying that demand -- like building more housing, so people can live closer to where they work and don't have to drive as far.

So what's the alternative, better way of satisfying demand for housing? Nobody has one? Then we ought to build more housing, even if we have to plow through some induced demand (which may or may not even be present) in order to satisfy the full demand.