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You're not wrong, it is definitely a housing issue as well, but it's also an infrastructure issue, it's just the land and infrastructure can only handle so many citizens living there before it doesn't work.
Ask anyone trying to drive to and from work in Los Angeles every day as an example of the freeway infrastructure how much it can handle.
Brain drain affects both the states that people are leaving from, and the states people are moving to.
That's an inherent flaw in that kind of car-centric design. Even then, red states have the same fundamentally flawed design; it's just not being stretched to the breaking point like a lot of blue cities are. That's just a matter of time though.
Population density can go way higher than what's in most of LA without turning it into Manhattan, but you have to make significant investments in transit to support it. There will always be people who want large detached single family homes with 2.5 cars, and there's nothing wrong with that, but it shouldn't be the only option the way it is in most of the country.