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https://www.census.gov/construction/nrc/historical_data/inde...
This data at FRED is much easier to work with. As you should be able to see, there was nothing exceptionally high about new housing construction in the first part of the 2000s. https://fred.stlouisfed.org/graph/?g=AA2Q
Earlier quoted context omitted.
> The analysis is so obviously wrong Are you talking about my analysis, or Nathan Robinson's (who I'm responding to)?
Your analysis is wrong in assuming that when developers acquire permissions, demolish buildings, rent machinery and pour concrete, buyers still behave as if there is shortage of housing. Nathan Robinson's analysis might be wrong too, but it is still more nuanced.
If OP’s vision is correct, when luxurious high-density housing in SF becomes oversupplied it will drop in price. If your counter-argument is correct, in this scenario luxurious housing will never be built. I reckon other housing will, though, and it’ll likely be tall buildings with higher margins. Either way the answer seems clear: using speculative investment to argue against new housing is misguided.