A possibly better law that allows some free market aspects to continue is allowing only those who work, attend school or have lived in the area X amount of year

A possibly better law that allows some free market aspects to continue is allowing only those who work, attend school or have lived in the area X amount of years with the ability to purchase or rent. This way people who need housing in the area are prioritized over rent seekers who have no connection to the area except for the fact that they have cash to purchase in the area. This would also reduce commute times and overall shift around the city population so everyone is closer to where they work or attend school.