But when labor gets too expensive pushing wages up, then it's no longer the free market, but it's a "labor shortage" catastrophe all over the media and we have to shed tears about the poor business owners wo can't afford a second Porsche, so immigration gets turbocharged until wages come down to their desired levels that businesses can agree is "fair".
The "free market" in the context of housing was meant in a satirical way hence the TM symbol. Of course that market is 100% fixed by design but we get parroted the story where it's 100% "free" as if the government has no control over the levers that wholly impact it's pricing (zoning and building regulations, immigration, interest rates, banking and loan duration regulations, banning overseas investors, banning AirBnBs, property taxes, etc)
https://www.theguardian.com/cities/2017/jan/31/britain-land-...
At least not until you factor in government. What landowners and land speculators clearly don't fear is huge swaths of land suddenly becoming available for building. Or sharply increasing interest rates. Or mass deportations.
A market failure is more like how a CEO is often incentivized to maximize the stock price in the short run at the expense of the long-term health of the company. That is how his compensation is structured.
The land owners take all the extra work and laugh all the way to the bank.
Of course if people collectively decided to work half as hard there would be less money for housing and then prices would come down. Workers wouldn’t lose out.