I was talking purely about the economics, challenging the idea that rent would remain unchanged, and so everyone would want to downgrade to a capsule dwelling. This is not true. Rents will go down, and a lot of people that can't currently afford a 1 bedroom unit will now be able to afford one.

As a matter of policy, I am in favor of safety regulations. If that makes capsule dwellings illegal then so be it. We can solve the housing crisis without resorting to capsule dwellings.