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It takes a ton of regulation and subsidies for any  urban area to exist.  Cities need food. Food comes from farmers. Farmers live in more remote areas that still need roads, power, and other infrastructure that all needs to be organized, built, and regulated by governments.  
You can say the same thing about industrial factories that supply jobs and products to cities. Or large commercial distribution centers. Or power plants. Or wastewater treatment plants.  These all make cities what they are, and they have to be carefully zoned so they aren't in the same places that people are living.  It wouldn't be nice to live next to a polluting factory or power plant. People used to do it in Victorian times before cars, and it wasn't very safe, clean, or pleasant.    
So yes, subburbs are allowed to exist by specific zoning laws, and there are a lot of issues with that. It's not about different levels of government interference, but rather different types of government interference. Because again, a great deal of government interference is required regardless of whether or not suburbs exist.
With little to no government interference, the border of my property ends where the border of your property begins. There is no allotment for roads or utilities.  It's every property owner for themself.  If people cross my property to get from one place to the next, there is nothing stopping me from building a giant wall.  Or building a path/road with a toll booth.  Or cutting your electric/cable/water lines.  It doesn't become easier to get around with no government interference; it becomes much much harder.  You get twisted mazes of narrow paths that are dangerous to travel down.  
For example, look to the various slums of the world:  these are places where many people are forced to live with essentially no government interference.  You don't end up with nice, easily traversable, clean streets with readily available amenities for all. >


With little to no government interference, the border of my property ends where the border of your property begins. There is no allotment for roads or utilities.

A property with  to way to access it is essentially worthless. It will be bought by a developer who will connect it to the roads.
Besides, that's not what u/DJJazzay is  arguing.  He's  right  though,  it  takes  a  ton  of  regulation  and  subsidies   to  make  suburbs    exists.  Without  those,  we's  revert  to  older  models  for  towns  and  cities,  that  predate  them.