What definition of "investment properties" are you using?
Does someone who rents two houses count as "investment properties"? How about someone who owns a complex with 50 units? How about a corporation that owns a complex with 500 units?
Under that definition, almost all rental residences in the US are investment property, and thus would be banned under the proposal.
Consider a friend of mine who owns two houses. If he lives in one, the other will be "investment property" if he rents it a significant fraction of the year and thus banned. He can't move back and forth to avoid that because there are only 12 months in the year and it takes at least 8 months (per house) to satisfy the "twice as often" requirement.
The only way out is for him to leave the second house vacant the vast majority of the year. That pretty much defeats the purpose of owning a rental and it means that someone who'd want to rent is out of luck.
What is a rental property if not an investment property? You are renting with the explicit goal of getting more returns (rent/equity/appreciation) than your costs.
Owning property for the purpose of renting it has serious negative effects on communities and society. Communities thrive when people live in them and value them, not when random people come for a few days, abuse the commons, and leave for somewhere else. If not banned, I'm all in favor of heavy regulation and taxation of investment properties, with a maximum number allocated as a percentage of the available housing. If renting becomes unpopular, people will actually have to sell and free up inventory, dropping prices.
It's curious that you imply that "everyone agrees" on the relevant definition but you didn't classify my examples according to that definition or say that investment or not depends on other things.
Of course, my examples are intended to show that there is no "clear and agreed upon" definition.
I just want to say, I live in a country where there are laws for and against almost everything, where most Airbnb listings are basically illegal, yet the city I live in is one of the top Airbnb destination.
What I mean, is that laws are useless if there is no means to for them to be seriously enforced, which is the case where I live.
On the other hand, if I were to create my own Airbnb website in that same country, I'd be shut down by the end of the week and put in jail facilitating illegal renting listings, while Airbnb executives risk absolutely nothing since they live in USA.
If I was going to spend a few trillion on infrastructure, I'd look into build massive housing blocks on the distant outskirts of the most expensive cities and connect them via fully automated high speed rail lines. Eventually the areas around the housing blocks would become cities in and of themselves if you put them out far enough.
Sadly, we're at the stage of this "crisis" where parody is the only appropriate response.