I think Vienna somewhat functions like this, and it seems to be fine. Not that individuals can’t literally own property and rent it out, but that most housing options are government owned.
actually a lot is privately owned, but by law 2/3rd of every rental property must be offered as subsidized by the city. so in practice you own the building, but the city decides who gets to rent 2/3rds of it since the subsidized units are only given to people who have a low enough income.