Interestingly, I'm reading about how the tribes in what is now Oklahoma were forced into private property ownership, which mostly worked out quite poorly for them. But before they had individual ownership, they had tribal ownership and that seems to be at least as viable a model for keeping people emotionally attached to their land and community and its future.
So I would not say there are not other models of legal ownership, but the emotional "ownership" is important.
I don't think relaxing planning rules is the answer either.
I think it depends on the rules and how and why they are applied. In the US they have often been applied in order to enforce race and class divides (though in almost all cases they are presented as high-minded).
Rules have sometimes been put in place to protect the investment of people who are there, but it has follow-on effects for the community. For a long time a nexus of entrenched property owners and environmental groups in the Bay Area were always pushing "low-density development" and blocking multi-family units at every turn. As someone who considers myself somewhat environmentally conscious (and who ran and built the Sierra Club Bookstore website while living there), I kept arguing that environmentalists should be in favor of high-density development, because it reduces the human footprint in multiple ways. It also makes housing more affordable generally speaking. In recent years the Sierra Club and others have come around to this, but for years it was anathema in environmentalist circles and it is still anathema in neighborhood advocacy groups.
What are the effects of this? On the plus side, it maintains those nice Berkeley neighborhoods. But it has other effects that make it super hard to live in Berkeley now. There was a story a while back (I think I posted it here), of a developer who wanted to build a five-story apartment complex of relatively affordable housing in Berkeley. It was stopped because local residents got their neighborhood declared a food desert which is an absurdity - I have never lived in a place with food, both fresh and prepared, so available within walking distance of almost everywhere as in Berkeley. Then, because one neighbor grew tomatoes that he shared with other neighbors, they succeeded in stopping the apartment building, because it would have shaded out the tomato garden.
The net effect of that action multiplied over and over and over is that it is great for those who already own houses and yard in Berkeley, but of course their kids can't dream of living on the same street. A lot of time these arguments about "preserving the character" of a neighborhood have deep class issues.
Is that a 5 bed for 2 people?
To me "too much house" means that you get an ARM with a low payment at the beginning assuming that somehow you'll figure out how to pay for it when the bigger payment comes due. Or it means, as Buckworks said, you are paying so much for your house you have no other savings. So a couple with a $100K income in rural Indiana might be just fine with five bedrooms for two people (bedroom, guest room, his office, her office, art studio - why not?) whereas a couple with that income in a tiny bungalo in Palo Alto, CA, likely has way too much house for their means.
