How can governments make housing more affordable without severely depreciating the assets of current homeowners?

For a prospective homebuyer, more housing supply sounds like a dream. If governments ramp up construction and boost inventory, prices could fall and homes would finally become accessible to people who’ve been priced out.

Take a house that costs $600k today. If it drops to $500k, that would be a huge win for affordability.

But from the homeowner’s perspective, that same drop means a $100k loss in value, possibly wiping out years of savings and equity. That’s devastating, especially for people who bought near the peak.

How do governments balance the goal of making housing more affordable with the risk of devaluing existing homeowners’ assets?