If "getting the hell out of the way" means removing red tape that was previously a case of the government causing there to be less housing then, then yes that's one way they can help.

If they're already at an ideal low of red tape (keeping in mind we probably don't want to get rid of laws that require things like making sure buildings are safe both for the occupants and for the builders), and aren't restricting the market in any foolish ways, but the market still isn't providing enough housing, then I disagree that the government shouldn't actively try to improve the situation.

Citing an example of a government apparently doing a bad job doesn't mean that every job a government does has to be bad. Otherwise seeing a private building company doing a bad job leads to also thinking private businesses shouldn't be allowed either.

At the end of the day both companies and governments are run by humans, who are capable of doing great things and terrible things, and of doing them both well and badly.

The response should be to argue about what a good government initiative could consist of, not to say that if there's a problem they should just throw their hands up in the air and pray that it improves by itself.