You'd need regulation to prevent people from working more. If I want to live in a particularly desirable house, I have to earn more money than the other people

You'd need regulation to prevent people from working more. If I want to live in a particularly desirable house, I have to earn more money than the other people who want to live there too, so I can outbid them. So I'll work harder than them to do so. (Trivial concocted example for illustration purposes, not meant to be nitpicked)