I live in the rust belt.

In Pennsylvania, for example, the reason why there is such a small amount of actually two-fold (I suspect the circumstances between California, and say the west coast are quite different).

Here is what Ive observed in PA, regarding housing (in the rustbelt, and is the 5th most populated state)

Most of the high demand areas already have older housing from the post war suburban craze. The high demand areas are limited on space and have a plethora of housing available.

This is due to:

1.Consistent decreasing of total population, over the past several decades, prior to the pandemic

2. Lower cost of living, even in counties with a high populous center.

I know that in the pittburgh area, for example, there isnt much room to build new housing.

This is better, in the long run, as building an older home decreases your carbon footprint, over a new purchase.

However, do to many factors, Allegheny co just saw its first population + in many decades.

Edit. I wanted to also add in, that we have alot of empty lots in urban areas as well. However, our more rural areas have also seen an uptick in WFH employees, who are leaving their former HCOL area.

Often times, new permits are so different by county, that it might be more cost effective do build farther away from your commute, depending on the lax nature of the permit requirements.