That's not really how it works as far as I understand. Their are economic epicentres, and building near them means greater productivity and economic growth. The further out you get, the lower the ROI. The problem is, many cities in the west, controlled by an aging population of "haves" who bought when houses were the price of a sack of beans, feel that they are entitled to live in the same neighbourhood they purchased in. Incumbent homeowners are blocking new development, which stifles economic growth and creates a supply shortage, driving prices up.

You got one part of it right: building more solves the housing crisis. But if you built outside cities, you're asking new homeowners (read: young people who contribute the most to economic growth) to live increasingly far away from where the economic growth happens.