Everyone should have the option of owning, but not everyone wants that, depending on where they are in their career or stage of life. Frequent job hoppers prefer the flexibility of renting. Some young adults want to minimize their responsibility, and renting lets them avoid some of the pitfalls of ownership with the downside of having a smaller space. (Specifically thinking of a bachelor friend who has no intention of owning - he is currently content in his one bedroom unit, living a minimalist life. That may change if he ever gets married and has a family.)

The issue we're running into is that individuals who do want to own are now getting priced out, due to lack of affordable housing inventory. New construction isn't providing enough starter homes, and the lack of supply has driven the price of the first homes out of reach for those who are ready to settle down.

I don't see why you'd say that. Renting is just paying the landlord for their service of giving you housing...just like you pay the grocery store for the service of giving you food, or pay the clothing store for the service of giving you clothes. Not everyone needs to own a farm; it's ok to pay someone else for food, and it avoids having to tie up a huge amount of wealth in a farm. Not everyone needs to own a home; it's ok to pay someone else for housing, and it avoids having to tie up a huge amount of wealth in a home. It's a personal decision, where for a lot of people (especially people who move a lot, or don't like being responsible for home maintenance, or just want a small place that doesn't cost much) buying a house makes no sense at all.

If your argument involves the phrase "building equity", having your equity tied up in a house means you can't put it in the stock market (where it would probably do as well or better than a house) or even a business. There are lots of ways to invest money and a home is not necessarily the best.