No one's trying that policy. It's certainly not what's led us to this point. Building is nowhere near fast enough to keep up with demand, especially in the areas with lots of homeless people, and especially in the affordable price ranges.
Seems to me the policy that has the consequences you describe is, in fact, the policy you described in the GP.
Reminds me of all the posts I've seen with photos of things happening in America—a country which is, quite famously, under capitalism—with captions saying "this is what socialism gets you!"
Just think through the consequences of your policy proposal. What you are saying is you will outlaw investment in a second house for rent. The result will be that only the people who can afford to buy a house can live in one. Everyone else, which is half of American households, has to live somewhere else. You haven't specified where that other place is, but I guess it would have to be larger apartment buildings, built and operated by larger organizations (corporations, or at best cooperatives).
I rent my house from the woman who lives next door. I could not afford to buy this house. I have a nice garden and my kids go to great schools. Your policy means that this arrangement is forbidden. My family is not allowed to access this life because I am not rich enough. That is a bad policy.
