It certainly takes something to look at a housing market where regulations enforce artificial scarcity and say that everything wrong with it is the result of capitalism...
Capitalism is the reason that regulations exist. Apartments cost less than single family homes. Makes total sense for developers to get regulations passed that prevent that sort of competition.
I mean, I suppose you could call regulatory capture 'capitalism'... But seeing as most people's response to 'capitalism failing' is to call for more regulation, I don't think that that's really fair.