The price of houses are actually quite reasonable except where new housing cannot be built due to regulatory permitting or lack of land. Otherwise, "used" housing typically sells at a "discount to new" housing. So hard to say that prices are unfair or a ripoff, when "used" housing is "on sale" compared to "new housing" which is a product of what it costs to build a new home.
Investors help support the housing market in downtowns. Typically, because they are "return" oriented, not "home" oriented, they stop bidding on properties when the price is unreasonable. We have bought homes for rent but not for the last three years, they were simply to high for us to earn even 5% on our money. Homeowners don't think that way, they tend to think in terms of affordable monthly payments regardless of the value.
The percentage of people that own homes today remains in line with the average over 40 years. So, home ownership is not "out of reach" of most people. So the system really is not broken.
Long term, the prognosis for the real esate market in most of the US is poor, except in growing urban areas and retirement communities. You want to make it worse?
Regarding your 100% capital gains tax.
If homes do not appreciate, then it becomes more expensive to own... and to rent.
Simple example, we rent out a $2 million home for around $60,000 per year. After taxes, insurance, HOA fees, it earns around $30,000 a year. A renter with $2 million needs to earn around 1.5% on their money to equal what the rent they pay us net of our expenses (they would have those same expenses). So explain, how the "renter" would be better off owning a home with zero chance of appreciation?
Meanwhile, rents would have to go up with 100% capital gain to pay investors to provide housing with no chance of a capital gains. Your scenario is more likely to hurt individual homeowners more than investors, since homeowners are often forced to sell to get their money for the next home, not so much investors.
My sense is you did not think out what you were recommending.
The real answer lies in reviewing the permitting laws in high population areas with no supply of raw land. Many communities limit multi-family house and have tough "height" limits on housing. Both of these cause housing prices to rise rapidly by restricting new supply.
Alternaively, as noted the real estate market has been dead in parts of the country for years. People who work from home can move to places like Belmont, WI where a beautiful 2400 sf 4 bedroom home in a quaint little town can be had for $150K.
