Nationalizing inner city land would likely have many unintended consequences. I could see it resulting in migration of people and businesses away from the nationalized area only to regroup at a new center that wasn't restricted by direct governmental control. Reasons for that that spring to mind are that planning permissions would certainly be a nightmare, difficult to obtain and extremely slow. If there was a hard quota of apartments vs commercial space it could create a bad situation for businesses and drive them away. The types of residential units may not meet the demand which could drive segments of the population to seek housing elsewhere even if the costs were higher. Poor design decisions for the units constructed could produce areas conducive to crime or just make it unattractive or inconvenient.

There's a long history of national building projects in many countries that have created problems like these.