Presumably, if a developer knows they'll be able to do whatever they can that's allowed in the zoning regulations, then the property value should increase even more as a significant risk has been removed.
For homeowners, constraining housing supply and ballooning their property values in the immediate sense stalls the economy at multiple layers. Without housing companies cannot attract hires, no hires means limited growth, or companies stop moving to your city. in the US, since this housing epidemic is practically national in scale, it means businesses just stop trying to expand in US markets where its impossible for people to live.
It means people who could otherwise be productive are instead destitute, and in macrospect that trend produces rampant poverty and criminal enterprise to compensate for the lack of legitimate business opportunity.
For every home owner individually the idea of deflating their ludicrous property values sounds bad until they can come to terms with the fact that their collective behavior contributes to diminished or absent growth both locally and nationally. You cannot grow industry on inflated single family home prices in major cities but you can wreck an economy and the lives of millions.
"X-ray techs can't take X-rays without access to expensive X-ray machines in the hospital, owned by the hospital's shareholders. Cement masons can't lay the foundations for houses without access to expensive concrete mixing trucks. Those of us who don't have property we can make money from are forced to sell our ability to work to a capitalist--we become wage workers. "
Even when I was the most de-humanized corporate drone at the largest company I've ever worked for, all I did was type on a keyboard. And I can easily afford those means of production.
I liked that article, it had great info on the workings of the construction industry, but I can't say I understand what, if any, action it was suggesting as a better alternative to build shelter?
Restrictive zoning regulations have nothing to do with capitalism or free market economy.
Existing real property owners have a serious financial incentive to oppose policies that might decrease the value of their property by 25-40% (or more), especially when a plurality of their net worth is tied up in that property.