>but it's not up to gov't to MANDATE it.

>Arguing that they shouldn't "loosen" the restrictions because the market _MIGHT_ determine it's still not worthwhile

Neither of those arguments are being made. The argument being made is that if the government intends to effect change in the housing market, it must concern itself with the economics, because those economics are largely determined by government policy and determine whether new housing is actually likely to get built.