If real eastate in NYC & SFO is a free market, why do homeowners & landowners need to go through a political process & seek favour with neighbours in order to g

If real eastate in NYC & SFO is a free market, why do homeowners & landowners need to go through a political process & seek favour with neighbours in order to get permission to build a 3 storey apartment building? A world where bakers had to seek permission of other bakers to increase their daily bread production wouldn't be called a market, it would be called a cartel, and no one would be surprised to see bread prices rising through the roof if the cartel members were successful at enforcement.