I'll agree that there is indeed a housing shortage, but I don't necessarily think that is what's at play here. Capitalists will always park their money when they see an opportunity to make a return, regardless of industry. Housing has never really been an elastic commodity, it is inelastic in nature due to the time it takes to build and the fact that it is a reasonably sizable asset that doesn't change hands at the drop of a hat (granted there are market products that contradict this, but I'm going to ignore them for the sake of this conversation). Further, they have always been marketed as an investment vehicle, albeit a long term one.

And while there is plenty of land in the US to build on, housing is only as attractive as it's local market. Plenty of communities have popped up via ambitious developers, but fall on their faces when the demand is inexistent (California City being a famous example). Better transit options can alleviate this, but people are still drawn to geographic proximity to jobs, schools, entertainment, etc.

Homes in high demand areas fetch a premium because people want to live where they work and play without the commute. These areas are already well developed, and yes had their been more relaxed zoning laws, more housing stock could have been built. But, I would argue that many communities built 50+ years ago were built with the then current demand in mind, not the demand of today. Sure that could be pinned on developers and city authorities not having enough foresight, but I don't really blame them for not being able to comprehend both prospects of an exploding population and the demand these cities currently see.

Short term rentals are tricky because no one is going to vacation to a suburb 30-45 min from an urban center or destination location, they want to be in the heart of the action. These properties present an ideal investment opportunity for these operators in that a) they purchase an appreciating asset, and b) they generate a short term return. It's almost a guaranteed profit for them.

Cities saw this problem growing, and should have taken preemptive action. Yet they ignored it because they were listening to moneyed interests. Now that it's become a full epidemic, it'll be much harder to contain.