The flip side is, ignore the problem, remove the building codes, and what will happen? I can tell you: gridlock. Over the last 15 years I've been visiting a suburb of Charlotte, NC. Every year I'm amazed how many forested have been bulldozed and shiny new subdivisions standing in their places. The result is a trip that used to take 10 minutes can take 40, or more. My father, who lives there and has been watching the local politics surrounding this, says everyone is just burying their heads in the sand. More building permits are issued and the problem gets worse and worse. The problem is, there is a lot more building planned, but still no solution to the transportation problems.
When it comes to infrastructure, market forces don't really work.
Suburbs exist only because of government subsidies - they wouldn't be built in a free market because they are just too damn expensive. They require massive public funding for infrastructure - roads, water, sewage, side walks, etc, over the course of decades. At the same time, that infrastructure is only used by the residents of the suburb by design. They don't permit through traffic nor do they allow for mixed use. The problem isn't growth in a free market. The problem is just the opposite in fact.
All those highways were put in with taxpayer money. And the parking at the other end is the fault of building codes. If developers had to pay for all the highway to their new subdivisions, the market would look very, very different.
When it comes to infrastructure, market forces don't really work.