https://www.merriam-webster.com/dictionary/commodity

People who criticize the commodification of housing I think tend to believe the correct and valid definition is:

(2) something useful or valued.

or

(5) one that is subject to ready exchange or exploitation within a market. (emphasis added)

I tend to focus on:

(1c) a mass-produced unspecialized product.

or

(4) a good or service whose wide availability typically leads to smaller profit margins and diminishes the importance of factors (such as brand name) other than price.

Housing was commodified after WWII, when we stamped out so much housing, it was cheap and available to everyone. When housing is that available, it removes much of the power of landlords to distort the market.