Should anyone wonder why the local rental vacancy rates are currently quite low, consider that during more difficult times, more people double up, live with their parents, defer divorce, or find jobs and move elsewhere. That diminishes the local demand for rental housing and the incentive to build more.
When the local economy picks up, the doubled-up undouble, the chicks again leave the nest, mating and multiplying looks more attractive, and outsiders move in to the more desirable area. This creates a wave of new demand confronting a relatively, temporarily fixed supply, an ideal situation for raising rents and providing developers incentive to build more housing. However, long lead times compound the challenge for the developer, who needs to have the new housing available when the market demand is high and to have it completed, built and sold before the next downturn.
The above begs the question of factors affecting economic/market cycles, not least being government policy.