Market economies work great in textbooks under idealized conditions of perfect competition, where all participants in the market are fully informed and have the option to enter or exit the market freely. In reality demand for housing is highly inelastic, significant informational asymmetries exist, the market is fundamentally constrained by the supply of land and the varying demands resulting from demographic change, and other factors.

Economic analysis that does not take these factors into account is not worth very much. It also fails to offer any useful solution for the underlying problem of rents rising faster than incomes.