Housing is now a commodity in America because there is not enough supply for demand. There are investors in the housing market because they have identified this problem and see an investment opportunity. Invitation Homes spelled this out in their S-1. But the fact is that institutional investors are something like 1% of the housing market (though they certainly have had an increased presence in certain housing markets in recent years). But they are not the cause of the housing supply crisis. Lack of supply is.
You keep stating this, but virtually every study done on the topic finds that building more housing, and in particularly increasing density, puts downward pressure on housing prices. But to the extent your ideal case study is a city that has decreased housing prices in a reasonably short period of time to allow middle class affordability, well, we live in a country where housing zoning and regulations have largely been established by local control (ie, NIMBYs). Do you expect that to have ever happened? Have you followed California’s and New York’s efforts to address this at the state level?