Local politicians colluding with developers is a story old as time, and deregulation of zoning would make it even easier. Europe is a great example of that, where majority of people under 30 are expected to never own a home and cities turn into concrete nightmares.
Developers bribe local government, investors fund developers. It is a simple system, and another way to channel public money into the hands of landlords, developers, corrupt politicians and investment funds is never an idea that benefits society.
Housing is a basic good, especially for Europeans, who culturally are independent and expect to have their own safe dwelling.
Strong zoning laws that promote family dwelling and heavy taxation or outright ban on property investments is the only way to fix the property market for the general population. Netherlands and a few German cities are already applying such measures.