The inflation of labor and construction materials is reducing housing starts, but we must contextualize it -- what matters is not just the cost of construction but the ROI. Cost contributes to ROI but it isn't the only component.

If it was possible to build in the most high-value areas, the high ROI would justify private capital inflows despite the high construction costs. But planning in high-value areas is dominated by NIMBYs like Marc Andreessen lobbying their local government, so approvals happen in low-value areas where the construction costs dominate the ROI equation, which depresses housing starts.

But you are right that more should be done to reduce labor input costs for construction. That can only help the situation.