Doing business (which renting out property is) is not a given right. The cost of doing business (taxes and regulations) is what makes possible the existence of the state at all - far from being a 'dysfunctional' concept.
The same goes for your own time and labor. You can't be a free person (as opposed to a slave) if you can't own your own time and labor -- if you can't sell your labor.
As with much else, the state gets to impose taxes and regulations. No argument there. But if those taxes or regulations prevent you from enjoying your ownership of property or self, then they are confiscatory and make you un-free. At the very least unreasonable tax/regulatory burdens make for a dysfunctional / distorted market, though as long as you can freely vote with your feet you're not so un-free as to be a slave. Still, just because you can move to some freer locality doesn't mean it's a good thing that the locality your leaving has high tax/regulatory burdens.
narrow rent control law is a capricious policy in general, not just for property owners. a bunch of semi-corrupt political lotteries don't make a good government or just society.