The only developed country that doesn't seem to have a housing crisis right now is Japan. After their real estate market collapsed in the 90s, they instituted a number of reforms to make housing less attractive as an investment vehicle. Now housing there tends to depreciate over time, not appreciate. Consequently, it's viewed not as an investment but as a consumer product, much like buying a car, and there is competition that brings costs down.

I think this is the sensible approach we need to follow in the rest of the developed world, but I don't think it's not going to be politically feasible until a lot of homeowners feel a lot of pain and give up on the idea of housing as an investment