NIMBYism Is Good If the N Stands for Nuclear (opens in new tab)

One big thing that could help address the problem is make buying a second home as difficult as borrowing to start a business or getting margin on a trading account. As it is, they are treated as any other primary home purchase because the government backs the loans. The government should not be in the business of propping up second home prices. The reason so many people are able to buy and hold multiple homes is because it's so easy to leverage 5x or even far more. Most margin investment accounts can only leverage 2x. This ease of getting highly leveraged on a home is also the only reason that homes as an investment outperforms the market. Because a 1% increase actually equates to a 5% ROI if you put 20% down on the house.

I think Japan is one country I know of where RE isn't considered an investment. Not sure if there are other places. Might be worthwhile to find out how they do it.

Not OP but Good question! a big part of NIMBY is driven by how much people's net worth is tied into their residence. So IMO you need to reduce this. It starts with convincing people that real estate is on average not a great investment. There is no way for primary residences to universally (1) be a good investment by beating inflation rate and (2) be more affordable.

This is more of a "cultural" thing, and I think most important.

Following that, in practice there are supply side and demand side methods of driving down the cost of living. The big ones are probably maximum height requirements, minimum parking requirements, and minimum size requirements.

You could create a tiered tax structure - which would be unpopular - where the yearly tax increases with time. In addition, you could have a progressive increase in tax based on the number of residences you have.