The most extreme example the world has to offer is not representative of what would happen if the US legalized housing. HK has almost 200x the population density of the US and almost 100x the population density of California.
Slums can be found in nearly every country's history. Housing regulations are important: it's zoning restrictions that cause availability problems, not quality regs, and it's important to make the distinction. (When your community is exempt from zoning regulations, you can do things about the problem: https://macleans.ca/society/sen%CC%93a%E1%B8%B5w-vancouver)
But zoning restrictions on housing maintain the prices of existing real-estate "investments" (see https://www.mcsweeneys.net/articles/housing-should-be-afford...). We're not going to have change until real-estate owners abandon the idea that housing is supposed to be profitable.
(Btw, I still think "don't build on floodplains"-type restrictions are important, even though those are also zoning restrictions.)
