One solution is taxation. If you just sit on real estate or a domain name withoutdoing anything usefull, it should cost you. If squatting stays a problem, raise the tax. You can lower tax for your first domain, just as you would for a primary home.
I'd question what doing something useful means long long before advocating for something like this. I have a few domains that might some day be in demand, and on the surface they do very little (if anything at all) when accessed directly from a browser on port 80/443. However, they are each doing significant, private things elsewhere, and the domain names are a convenient entry and branding point for those who need to know.
I typically suggest something like your first 25 domains are exempt, registered businesses also get some reasonable amount. Past that there should be a relatively hefty squatting fee. Maybe additional exemptions can be applied for.
Who is going to monitor this? How do you enforce this globally? What about defensive registrations? I know some companies register thousands of typos, spend millions protecting their brand. Is it on a per TLD basis? It would have to be since different TLDs have their own rules, especially ccTLDs which are governed by their own countries. How do you prevent the oversight organization from being captured by vested interests or IP lobby?
There are so many details which cause problems with these 'simple' solutions which once you start digging, you end up having to compromise a lot and end up with an equally, if not more, shitty solution.
A very valid comparison, they indeed share lots of characteristics. I also feel that adaption in real estate would have societal benefits.
The difference to real estate business lies in the fact that it is much more diverse and way harder to manage.
Domains are managed by one organization, ICANN (with respective tld management), which facilitates a policy change. We also see changes in digital space progress much faster.
There are approx. 600'000 new domain names registered over Verisign in Q3 2020 alone [1]. In the future, the significance of the problem will only grow.
* Buying up a limited resource with the intent to sell it to someone else later
* Often is good land that could be used by someone else to create value instead
* Lots sit unused for years waiting for a buyer
* Land in "just the right spot" for me is being "squatted" by someone trying to flip it
Do you have the same opinion about that business, and if not, for what reasons?