That simply means there isn’t sufficient new supply proportional to the new demand. New supply may make an area more desirable, inducing more demand. But there is a limit to the total demand, so one just needs to keep adding supply.
That's a very tech focused idea. Chicago is currently having infrastructure issues due to demand. (the city wants to use that to show "see we need more money" the transit system is always busy.. yet isn't considering how to address that issue)
Anyways, new developers are only choosing to build "luxury" apartments.
Here's an example:
when I moved into logan square: I was paying 1350$+100$ for a garage 2br/1ba. That was about 200$ more than the places around it.
Now that 10+ high rise buildings have been built near by. A place similar to mine costs $3200, and studios are going for 1800. (Either limited parking [as in you are competing with others to rent a space] or no parking at all)
Has the area improved? Nope. Businesses are having an even harder time staying open.
Unfortunately, current regulations and voters make it impossible to create another Chicago/NYC/SF.
The whole idea that increasing supply will drop the price isn't 100% accurate. In Chicago we've had lots of new development in an area that wasn't that expensive to be in. Now we have 900sqft 2br places that are 3.2k a month and studios for 1800 in that same area.