VC money is meant to crush the competition and lock in the consumer to charge rent.

This is not anything close to correct lol. VCs specifically do not invest in mature companies or they aren’t VCs.

Why would any commercial real estate firm allow affordable housing to exist when they can scalp it on investment properties and leave them empty? Why build affordable housing when the margins are small?

All housing built helps other housing come affordable because it increases supply. You are correct that there is little purpose intentionally building less valuable housing