Yes, I am aware of how the capitalist system works. And I am aware that it is working as intended. My statement is a statement of values.

Supply and demand are relevant, but the market still doesn't allocate resources effectively and requires regulation to prevent predatory housing prices because of said inelastic demand.

So sure, if you want to make a semantic argument, supply and demand "applies".

Does it efficiently and effectively get housing to those who need it? Absolutely not.

My statement is a criticism of capitalism and the way it works.