I mean we know how capitalism works. I personally feel there needs to be some type of regulation or people will suffer however. People are just gonna do whatever makes them the most money otherwise
Sure.
If you want to regulate a complex system a good starting point is to understand why the system works the way it does. Otherwise your regulations will not have the effects you hope for.
Rent control is a good example of that failure. There are basically zero examples of markets where it has actually worked.
People act like it is such a simple problem but you just can't keep building houses everywhere.
Yes you can.
I mean I wouldn't build houses. I would build high-density housing. Single family homes shouldn't exist in any great number in places like the Bay Area. They don't exist in Manhattan!
But we can absolutely build housing. The dysfunctional housing markets I'm familiar with are literally full of poorly utilized land that has been devoted to low-density housing. That's why there's no housing! The land was used incorrectly!
More houses increases pressures on roads, means more parking spaces needed, more traffic control. More houses increases the pressure on sewage and waste disposal. More houses increases the pressure on local schools, hospitals and GP surgeries.
...yes? If more people live somewhere then more public services will be required for those people.
This doesn't sound like an insurmountable problem. As I understand it, lots of people in Tokyo have access to public services, so any place less dense than Tokyo* has no excuse.
Rent control stops houses being used as investment vehicles and instead frees up houses for people who actually want to live there. Rent control allows communities to thrive without being suddenly priced out. Rent control allows people to keep more money in their pocket so they can spend it on things that drive the economy.
I spent the last ten years of my life living in rent-controlled areas of the San Francisco Bay Area.
Rent control utterly failed at accomplishing any of these goals. It is impossible to overstate the magnitude to which rent control did not solve these problems.
If this is your argument for rent control then it's basically a stone that keeps away tigers.
Rent control isn't a magic bullet, and can obviously cause problems if done badly (like pretty much any social policy), but acting as if "the free market" is this magical solution to all problems is silly also.
It's not a magical solution to all problems. It's a specific solution to this problem, and in general, any problem where the issue is that supply is being artificially restricted by bad public policy. Increase the supply!
And new supply isn't coming however. And the reason is why? Is it because developers can't make profitable lower cost housing in those markets?
Yes, in my observation, it's because captured regulatory agencies have made it uneconomical to build high-density housing by adding lots of expensive barriers to new development.
The solution to this is not rent control!
* Approximately all places.