> There is one issue with the developers - they have less incentive to build enough homes to actually drive down prices via market forces because it means less profit for them.

People were building their own homes for centuries before there were "developers". I would argue that over-regulation has made it extremely difficult for small builders or family builders to attempt to build their own homes. Only large corporations with a legal team can run that gauntlet.

If regulation were reduced, we'd probably see a lot more small time builders, or people taking classes to learn how to build their own homes, cooperatives being set up (possibly organized through Y Combinator startups dedicated to that) where people could Amish-style bring a community together to build homes.