>This zoning isn't a free market--it's a politically imposed regulation that favors current SFH owners at the expense of others.

Zoning is very much a political creature, true. Not sure it was ever intended to be "free market," whatever the heck that means in this context. Its purpose is to provide different zones for different uses within a municipal entity. It neither favors nor disfavors single family homes.

Single family home zoning is intended to provide areas, i.e., zones, where single detached homes are the only type of structure (aside from a detached garage) that may be built on one specific lot. The zoning allows for the formation of residential areas in which other types of intrusive construction, ie, high-density housing, industrial or manufacturing, warehouses, transfer stations, XXX uses, etc., are not allowed. Those types of uses are allowed in other areas of the municipality (indeed, most states require a municipality to provide zones for other uses) within those specific types of zones.

Zoning of any type has long been a controversial subject. I understand why those who advocate for doing away with single family housing so, but outside of Maine rezoning away from single family homes has resulted in increased density, increased crime and increased gentrification of older and more stable neighborhoods. It all may sound great in theory, but the result is not always what the loudest advocates expect.