Profit maximizing capitalists prefer the regulation. Especially if they have an existing property portfolio, a regulatory market against building provides an in

Profit maximizing capitalists prefer the regulation. Especially if they have an existing property portfolio, a regulatory market against building provides an insulation from risk and a better return on their existing investments. New buildings require a much longer minimum investment timeline because the building doesn't exist yet. It's also far easier. So if you let the free-market write the rules here, you'd get essentially exactly what we already have, because that's essentially exactly what we've already done. Instead, if you really want a free-enterprise approach that encourages better land utilization, you'd need to look before you leap. For instance, a conservative rent and property resell value control would guarantee a maximum ROI for the buy/hold and do nothing/dump strategy. Otherwise, you'd have to indirectly subsidize new developments through tax breaks and other financial incentives (which is exactly what is happening) Alternatively, if you're willing to forgo the engineering and manufacturing of markets you could use community land trusts, which is likely a far simpler and less issue-prone model of execution. I've personally invested in a few and have seen a long-term, stable, dependable 3% ROI (which is better than other equally conservative vehicles) so this doesn't mean that capitalists and investors are gone - just all the messy parts.