The presumption (right or wrong) is that the problem the first regulations solved is bigger than the problem that the regulations created. After seeing this new (smaller) problem, more regulations are applied creating a new even smaller problem. Making life better.

This may or may not be true, but that is the idea.

Rent control (regulation) creates more problem, I agree with that.

But I don't think it's fair to say that expensive housing, full stop, is a product of regulation.

There are desirably places to live that have housing that goes up at a good enough rate to be considered an investment. As long as there are people of sufficient means, some of them will add property to their portfolio of assets. A home that sits unused on prime real estate is, frankly, more of a drain on that community than $100,000 in cash sitting under a mattress going unused.

It's not perfect, and it IS a regulation, but penalizing people for hoovering up housing stock and then not using it, can benefit society.

I'm not sure I'm in favour of rent control in the first place, but as a Vancouver renter I have seen vacancy tax really help with both house prices and rental availability. It also seems to be a fair tax, you are being taxed on a luxury that affects other people negatively.