At the bare minimum, if the monthly income from rental properties doubled, I suspect that would have a major impact on housing development.
It all depends on why development isn't happening, but I have a really hard time imagining that supply would not increase even if the major restrictions are due to other factors than development costs.
Well, the thing in Germany is that (1) there is actually a decent amount of new housing being built in cities but (2) there are often strict limits around where you're allowed to build, what you're allowed to demolish, and how high you're allowed to build. And during the past 5 years, demand has vastly outpaced supply. Property prices and rents in cities are absolutely insane, and there is no indication that that is going to stop.
And the reaction to it from people is quite... shortsighted? From my perspective. Often the exact people who would benefit from a better housing market vote for parties who are more restrictive in terms of new buildings. There's this perception that new buildings are only being built for "rich" people, which is true, but it also means the rich people aren't competing for your shitty apartment anymore. But somehow, people don't really think about that.
It all depends on why development isn't happening, but I have a really hard time imagining that supply would not increase even if the major restrictions are due to other factors than development costs.