No, it is a comment about overcrowding. The point is: there was no way to move lots of people into these areas to do work and maintain living standards. Buildings also cost labour to produce, now that society is rich, can everyone just buy infinite building materials?

Correct, the ones we have now that only rich people can buy and which exist during a shortage of housing. Assuming that this can just scale up to house millions of people makes no sense (and has never occurred anywhere, the reason why public transit systems are so important is because it has never been possible to economically build enough housing within cities).