Theoretically but that’s just a burueacratic hurdle. Struggling towns would likely build if they knew people would come in but could get stonewalled by local people too. (Don’t let in them city slickers!)

The issue is regulation. And I think it’d be better if we just allowed for taller buildings in some of these areas rather than sprawling out everything. Many people don’t want a SFH with a little yard and are happy with an apartment.