Pure Capitalism would lead to Armageddon: Housing

Housing

This is a series of objections, starting with the common misconception that capitalism and freedom would hurt everyone, especially the poor, creating unheardof poverty for all. See the initial post here and the entire category here.

Housing is a commodity like any other. 

The reason we have messed up housing markets, and riddiculous prices are three-fold: 

1. Massive credit expansion fueled by fractional reserve banking, artificially low interest rates and money-printing by the central banks. 
2. Government restrictions on where to build, how to build, application process, regulations of size and price levels.
3. Price ceilings: Government says that for certain rentals, you cannot charge above a certain amount. Effect: fewer rentals will be a) constructed, b) put on the market. 

Essentially: we have crazy housing prices because (1) above pushes prices up, creates bubbles which we saw in the financial crisis and (2) because demand for housing outstrips supply, where potential supply has been strangled by government interventions, and (3) yet again supply being strangled by government interventions.

In a free society, none of the above would occur, housing would be constructed in accordance with consumer demand like any other product. Quality, size and prices would probably differentiate to a larger extent than today, increasing supply so that prices for housing would come down. 

Perfect example of Government Failure. Not even remotely an effect of markets or capitalism.