Alex Steffen takes this strong position in the Guardian:

Built in sufficient amounts, new housing can check the rise in housing costs; but with good design, it can also help grow new people-centered streets, increase use of bikes and transit, and promote healthier and more active lives.

Housing construction and more residents help the local economy and create far more jobs than subsidies for large corporations. More taxpayers help our cities balance their books though larger revenues and more efficient infrastructure. New housing is one of the few truly powerful tools citizens and local officials can actually make use of to improve our cities and the world.

You can also find an expanded version of this argument in Edward Glaeser's book The Triumph of the City. Glaeser sees the slow growth of new housing in Manhattan—a slowness whose roots, he contends, is in the mid-century urban activism of Jane Jacobs—and fast growth of new housing in Houston as the reason why the former (a natural ecotopia) is closed to everyone but the rich and the latter (an environmental nightmare fueled by cheap energy) is open to those in the working classes. Like Steffen, Glaeser, who is a neoclassical economist (that right there should trigger your alarm bells), believes that government-imposed rent controls will not do the trick, and indeed may even make the situation worse. The best solution, then, is to ease controls on developers and the market and, correspondingly, weaken the political power of neighborhood activists (the sort of people who want everything around them to stay the same). It all comes down to the old and trusted laws of supply and demand.

The big problem with this (and I do agree that new housing is the way to go) is that the capitalist market (and there are markets that aren't capitalist) is likely (speaking from the perspective of history) to aggressively distort and exploit the housing crisis. If you have a construction boom under capitalist market conditions (rather then one managed and supported by the state—public housing), you can expect the whole sad show: yet another massive bubble to emerge (the bursting of which will hurt yet again the poor), and a great deal of waste and McMansion-scale stupidity, as the emphasis of this kind of growth will certainly be concentrated on expensive (big profits) rather than affordable housing (moderate profits). The only kind of mind the market has is a mind of its own. We need new houses that are available outside of the mind of this kind of market.