Yes, the state can embark on massive construction of housing. The advantage is it gets around zoning restrictions on building height.
State-funded housing tends to be unimaginative/repetitive in design and lower quality though. The same outcome, of higher density housing, can be achieved by simply repealing zoning restrictions, and if that doesn't do enough, by replacing sales taxes with land taxes, which discourage sprawling land-inefficient housing.
There may be advantages, in political economy, that makes overcoming special interests opposed to densification easier, with the state-led approach though.
As for special interests in general, there are plenty in and close to the state itself that would massively profit from large public projects, so I don't see this as a question of whether or not we support special interests. It's simply a question of which special interests.
State-funded housing tends to be unimaginative/repetitive in design and lower quality though. The same outcome, of higher density housing, can be achieved by simply repealing zoning restrictions, and if that doesn't do enough, by replacing sales taxes with land taxes, which discourage sprawling land-inefficient housing.
There may be advantages, in political economy, that makes overcoming special interests opposed to densification easier, with the state-led approach though.
As for special interests in general, there are plenty in and close to the state itself that would massively profit from large public projects, so I don't see this as a question of whether or not we support special interests. It's simply a question of which special interests.