Homes should not be an investment vessel. We have policies that make them reasonable investments, which leads to price increases, scarcity, NIMBYism, etc.

it never was a policy to make the street or sidewalk a residence

That's literally the end-result of NIMBYism run rampant. If you don't want lower income housing (or homeless shelters, or drug treatment centers, or mental health case facilities) anywhere near your home, then you have to accept that there will be a population of people that need any of those things who now must go without, which then leads to homelessness, crime, etc.

The extreme outcome is walling off neighborhoods and hiring armed guards as they do in many parts of South Africa.