We did build housing, yes, just not in the places that needed it. The academic evidence is pretty strong, see https://www.nber.org/system/files/working_papers/w8835/w8835... for the divergence of price from costs of construction only localized in some areas. You can zoom out to see a literature review here too: https://www.nber.org/system/files/working_papers/w20536/w205...

For a specific critique as it pertains to Capital, you can see the analysis here: https://www.brookings.edu/wp-content/uploads/2016/07/2015a_r...

summarized here: https://www.economist.com/finance-and-economics/2015/03/28/t...