Markets do correct themselves, usually at the expense of the poorest or least powerful.

A hypothetical scenario where this market could self-regulate is 1980s NYC happens again in 2020. Blight and crime everywhere, but wow! Look at how that commerical real estate became more affordable.

The point of government regulation on these sorts of things is to reduce how far the pendulum of capitalism swings. When it moves too far in either direction, it only benefits a few people.