I'm stunned that this idea is getting any kind of consideration at a time when extreme concentration of wealth and political power is a frequent topic of conversation.
Let's take a look at the rental market in Sacramento [1]. 2008 hits, and a single investment firm buys up 50,000 houses around the country, mostly in densely populated areas like Sacramento, and flips them into rental properties. In Sacramento county alone, they buy up 1500+ properties through a variety of subsidiary companies. (I'm suuuuure they price all their rentals competitively.)
And these guys aren't the only player in this game. Across California, as many as 25% of single family homes are being rented from institutional investors.
So now, let's give these guys the ability to buy any property they want, whenever they want, so long as they can come up with the cash for it. How will this play out?
a. They'll have far easier access to capital than you or I or any other unfortunate shmuck in this scenario, which means they'll be able to buy properties at much lower interest rates, lowering their overall cost to purchase.
b. They can then set the price to whatever they want for their market niche. They might rent the properties, set them up as vacation properties, or sell them back to upper-class buyers for a tidy profit. Or, heck, just let them lay vacant and wait for the market to creep upward, as is happening right now with foreign real estate investors all over the place. [2]
c. They'll have the ability to set higher prices because, for them, the increased tax costs will be covered by their increased profit margins, and they'll have the resources to find or purchase any tax code loopholes that will improve the situation even more for them. They'll also have an incentive to artificially inflate their property values because it'll make their portfolio look that much richer, which'll make it easier to secure even more investment, to buy even more property with.
d. Meanwhile, everyone who doesn't have a ton of money in the bank and a stellar line of credit gets kicked out of their house and forced into one of two situations: dense, expensive urban housing, or cheaper rural housing in economically depressed areas. In either case, these losers' purchasing power just evaporates.
e. The few people left deluded enough to believe they might not be poor someday have the lovely option of buying into this mess through companies like https://fundrise.com/. Of course, they're contributing to the problem by collectively giving lots of extra cash to the very people that are artificially inflating housing markets, but hey, at least you get 1 or 2% compounding out of it.
f. It at some point the peasants start getting noisy, they'll just contact their buddies at one of the three media conglomerates in the country and run some segments on how un-American it is to "redistribute" money (notably: it's only un-American if you're redistributing from the rich to the poor), and everyone getting screwed in this scenario will be convinced that they should feel proud to be screwed so hard.
This is one of the worst applications of "let the free market sort it all out" I've heard in a while.
[1]: http://www.kcra.com/article/this-is-the-largest-owner-of-ren...
[2]: https://calmatters.org/articles/data-dig-are-foreign-investo...