When they seize these properties, how should the government determine who gets to live where? Should it be based on your profession? Your family size? Your standing within the Party, Comrade? Perhaps your ability to bribe the government agent who is responsible for assigning housing? What if there’s not enough housing for everyone and the government is behind on building more? How many random strangers are you okay with sharing your apartment with?
Resources are fundamentally finite and unequally distributed, even under communism.