Earlier quoted context omitted.
I'm not an economist, but the first definition that came up for me was: > an economic system in which prices are determined by unrestricted competition between privately owned businesses. And the word unrestricted is underlined. It seems to me that land use restrictions (I mean, it's literally in the name) are directly working against this philosophy.
Unrestricted in this sense means that both parties are able to deploy their capital as they choose, and specifically without outside requirements. In this case someone took a piece of capital (land), and traded most of the rights, but not all to someone else. The buyer took the deal knowing that they hadn't purchased unrestricted use of that land, but instead a limited use of the land. Both parties agreed to the deal…
This is my pet peeve with certain forms of right-wing libertarianism. If it's possible to recreate all the market restrictions of a totalitarian government through private property, markets, and cunning; then what does that kind of libertarianism actually say? Tyranny is only bad if the tyrant hasn't signed the right paperwork?