> This ends up recreating housing crises of big cities because people that live and work in the town are getting priced out of living there.

Here is research that contradicts this assertion.

"We ultimately conclude, from both theory and empirical evidence, that adding new homes moderates price increases and therefore makes housing more affordable to low- and moderate-income families. "

https://furmancenter.org/files/Supply_Skepticism_-_Final.pdf