If it was a true free market, housing wouldn't be an issue because developers wouldn't be forbidden from building density.
Capitol hill is a disaster for city living as most of it are single family homes, whereas they should be 5 story condo buildings.
Capitalism and free markets are not synonymous, and you can have the latter without the former (indeed, that was the case for most our history as economic species).
Capitalism is detrimental to free markets because it has inherent positive feedback loops that concentrate capital. Concentration of capital inhibits competition, and a market without competition is by definition not free, regardless of the amount of government regulation in it.
It could be, in principle. The problem with monopolization of capital is fundamentally caused by our overall conceptual take on private property as an abstract concept. Within that framework, you need regulation to keep the market free. But it's not the only framework that is possible; e.g. consider the situation where all capital is commonly owned and held in usufruct by its actual users ("everything is a co-op").
That's because it is. Free-market socialism is a thing, with a spectrum from centralized demsoc to left libertarians to anarchists. "Freed markets" is the term usually used specifically in the latter context:
Usually this dialog line goes the ancap route, I'm pleasantly surprised
I do think you need some mechanism of enforcement though, history has shown that violent people will easily come along to dominate in the way that they see fit
Ironically, I'm former ancap, although that was 20 years ago now. But I don't think that any ancap would be willing to assert that "capitalism is detrimental to free markets", not even the ones who argue that monopolies are actually good by definition because they're market-efficient. That unregulated capitalism and free markets are synonymous is practically dogma in those circles, or at least it was in my time there.
History did indeed show that violent people will try to take over - it is how we have the system of governance that we do today, after all. But individual violent people are not really dangerous to the community as a whole; it's only when they organize in sufficient numbers and possess sufficient resources that it is a threat. I believe that the best way to secure society against such threats is a broadly decentralized organization, such that any attempt to organize to concentrate power is clearly visible in its early stages and can be nipped in the bud by those immediately adjacent to it, without escalating it to higher levels of governance. The latter should be mostly about coordination of efforts and plans, not coercion.
The actual amount of policing power and the exact level of governance on which it should be the strongest is something that, I think, would need to be figured out by experiment. Maybe Murray Bookchin is right and it is, indeed, municipalities. I would hope that it can be more fine-grained than that. But I'd be immensely happy with any working proof of concept, so long as it does not preclude further tweaks and experimentation. If Rojava lasts, it might provide some more useful data.
Market will move instead to where it is reasonably cheap and labor is available, leaving a ghost town behind. Ultimately this results in high concentration.
There's literally no force compelling it to invest in a failing area, or one perceived to be failing.
