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You're exactly right that it's a supply and demand issue, which is why I find it odd you'd focus on a relatively small subset of the issue. Putting that aside, the original context was - affordable housing. That's different than a path to homeownership. Your hypothetical doesn't account for places like California which have rent controls that provide for affordable housing.
The real issue - which we agree on - is inventory. The issue is way more complicated than investors and flippers (e.g., mortgage rates, supply-chain issues, people wanting more land due to the pandemic, etc...). It's bizarre that you'd focus on penalizing small business owners who flip houses to address the issue. I get that you don't like them, but how are they a net negative (e.g., how do you quantify that)? How do you know it's so easy (e.g., how do you know that they're not trying and flaming out) and why is that a bad thing anyway? In this market, it probably isn't easy or all that profitable considering cost of supplies and the low inventory.
If anything, I could argue that home flippers actually increase home inventory by taking uninhabitable homes and rehabilitating them to be fit for normal occupancy.
These aren't human traffickers - and are oftentimes entrepreneurs who busted their ass to making an honest living.
Random consumers see people get into these fancy homes then they look at their conditions and they too want a home. What do you think drove the house flipping craze? 
