We don't really have shanty towns in the states. We definitely don't have a Kowloon Walled City, which is an example of what can happen when no regulations are involved (and somewhat remarkably not burn down and kind of thrive even if still a slum).

https://en.wikipedia.org/wiki/Kowloon_Walled_City

Maybe it's OK if some housing is less perfect and closer to ashanty town. I'd rather live in a shanty town than a cardboard box under the freeway. If nobody wants to live in the "shanty town" nobody will move in and no investor will want to build another one. I sometimes think that the provocative way of putting all this is that we need more slum lords. They filled a need.

> Making housing cheaper also means making higher quality housing cheaper.

Or, much more likely, builder profits higher.