Well they do something. Management is still a thing, and the people who did develop the housing had to be paid.
Sure there's management, but that's not what people are paying rent for. They're paying rent purely for the privilege of being allowed to live in a house that's owned by someone else. Never mind that people need somewhere to live, you have to pay for the privilege because this other person with money already owns it sorry.
And the people who developed the housing would've been paid by the people who bought the housing in the first place.
What makes a rent price ridiculous in your mind? To me, if people are willing to pay a price for a house to be able to live there then that's not a ridiculous price. If people aren't willing to pay the price, then the renter will have to choose between lowering the price or losing out on rent money altogether. It works itself out in the end.
A rental price may not be to your specific liking, but the economy doesn't work like that. You can't just say "this is how much I think is fair" and have everybody bend over backwards to bow to your specific whim. Otherwise you would have to have a completely separate system for micromanaging who deserves to have what thing based upon what merit or credit they have, and it would end up looking an awful lot like money anyway.
People are willing to pay these prices because they're fucked otherwise. And maybe rent is cheaper outside the cities but all the jobs are in the cities so they'd end up just losing any money they'd save on rent on their commute.
And this might sound a bit out there but I think everyone should have the right to have somewhere to live. I put housing in with healthcare - it should be free for everyone. We manage with the NHS (well, inasmuch as the NHS can manage with it being sucked dry by the Tories), housing should be the same.
Capitalism is the natural way of things. The only other way is to limit human expression and freedom. Suppose we live in some world where everybody has the same exact amount of property, but different skill sets. And suppose my skill set is building nice houses. Well everybody has the same house, but I start building my house to be way nicer than everyone else'. Some of my friends look on in wonder and jealousy, because they want the nicer thing. Because humans always want the nicer thing. There's never a point where you just say "this is enough." So I tell them I'd love to help, but if I start helping then I'd have to sacrifice time I was going to use for other things. They say that's okay, we'll barter for your time! You give us house building and we'll give you something in return. Ta-da! Commerce and capitalism is born. The only way to stop that is to say no, Lili, you can't build nice houses for yourself or anyone else. It's not "fair".
What you described was a market, not capitalism. Market socialism exists. What defines capitalism is capital, i.e. the private ownership of property.
To come up with some analogies:
Capitalism - person owns computer, pays other person to do work for him and gains the profit
Socialism - computer is owned publicly, anyone can use it to do work, they get paid according to their contribution to society
Society has only gotten to where it is today because of ambition. If you can't be better than you used to be, then there's no ambition. We see this even today in communist countries where their artists are floundering. Everything is owned by the government so the people say why bother? I'm not just making this up! I've talked to a couple artists from North Korea about this and that was their exact sentiment.
North Korea isn't a communist country. There hasn't been a communist country. Hell I'd even say there hasn't been a socialist country. I mean Lenin even described the USSR as a state capitalist society.
A happy medium would be nice. Unchecked capitalism is destructive
These insane wealth disparities we have (99% of the wealth concentrated in 1% of the people or whatever the figure is) just because someone had nicer house building skills. It's because of all kinds of bullshit.
Capitalism itself is destructive. It will always end up in a sort of proto-feudalist state - the people who control capital will want to hold onto it, even to the detriment of others. Fortunately for them, the people who control capital have the most power. The people who control capital control the media, they can lobby governments, they can do stuff that normal people just cannot do, because they own the capital to do it.
Social democracy. Though, you don't have to go that far left. Nordic model.
Wait, social democracy is considered far left? To be honest, social democracy isn't good enough. I mean, look at what's happening across Europe - all the social democratic parties are failing