We would need 'China style' decisions - which ended up with building so many apartments, that they end up with a significant percentage of them being empty, and the ripples of those decision will crush their economy for the years to come.
The music has stopped. It will take some time, but the outcome is almost inevitable.
Competitive markets in general are pretty good at matching supply and demand, even when demand is pretty all over the place.
Cars are a great example in the US — sure, there are times when prices go haywire from supply shocks (e.g., due to chip shortages in the pandemic), but outside those no one really complains about a “car crisis”. There are new and used cars available at very many price points, old vehicles get retired and new ones are manufactured, etc.
In housing, one major reason we don’t “just build more” is precisely because of regulation that either prevents housing construction outright or makes it very expensive, nominally in the public interest. We don’t need state owned enterprises paid to construct vacant apartments — we have plenty of companies and individuals willing to build, we just need to let them.
Your example perfectly supports that!
Central planning is kind of where we are now already — transportation options are severely restricted, transit costs are subsidized in some areas for some people but not others, etc.
Competitive markets in general are pretty good at matching supply and demand, even when demand is pretty all over the place.
Housing is a great example in the US — sure, there are times when prices go haywire from supply shocks (e.g., due to mortgage bubbles or material shortages in the pandemic), but outside those no one really complains about a “housing crisis”. There are new and used houses available at very many price points, old buildings get retired and new ones are manufactured, etc.
In transportation, one major reason we don’t “just build more” is precisely because of regulation that either prevents rail construction outright or makes it very expensive, nominally in the public interest. We don’t need state owned enterprises paid to construct unused trains — we have plenty of companies and individuals willing to build, we just need to let them.
In Spain, there was high demand for property prior to 2008. In areas in the UK, there was high demand for property across most of the country. Then credit became harder to get after the GFC, and suddenly the demand just wasn't there. In Spain, property prices in many area more than halved within a year. What happened? Suddenly everyone moved out? No, the demand was just demand from a different source.
Actual house price increases outstripped rent increases by multiples, but suddenly all of that demand to own just disappeared when the credit driven boom went bust (not everywhere).
There is often more to it that just build more.
The base demand for housing compared to supply in the UK is that much worse.
We have a housing crisis because restrictive zoning codes prevent housing density from rising to meet demand. The market is not being allowed to work properly, and has not been for decades now in many places, so we have accumulated a huge backlog of unmet demand.
If someone can't find a house because there are short-term rental properties, the solution isn't to force someone to give up their STR, it's to build another house.
I absolutely recognize that short-term rentals have other undesirable effects on a neighborhood or building: noise, constant random strangers in the building/area, etc. I think those are reasonable reasons for banning or restricting STRs, but "housing shortage" is not among them. If you have a housing shortage, the solution is to build more housing, full stop.