Interest rates are not an effective vehicle for controlling the pricing of collateral. So the "raising rates" point is moot. But yes, flexible income does let people purchase cheaper housing.

All the zoning and financing barriers get overcome eventually if there is a demand.

We need to stop using money altogether to manage critical resources like land and labor. Ideally, money ceases to exist at all. It's really a primitive information system for resource allocation. So simply stop selling your goods and services for money, ie don't earn money, earn the things you buy with money.

This is a mental switch nothing more. Visualize what you want, and then visualize the most expedient way to acquire those things. You can still use money, but it's irrelevant to the calculation of decision making.