That makes zero sense. Do you think those rental units disappear off the market? There isnone unified housing market, rent and buy. People can still rent if they can’t buy.
Building more will inevitably fix the housing market, even if one investor owns every single new house.
Question: Adding out of state investors to the demand pool ( that additionally can out bid locals) will likely
A. Increase house prices
B. Decrease house prices
Question 2: adding rent seeking middlemen between people and housing is likely going to
a. reduce costs for housing
B. Increase cost for housing
So there’s a finite supply of house, investors from out of state are now competing, increasing demand but also have deeper pockets. Now the locals who would hav bought are forced to rent, increasing demand for rentals. They investors aren’t going to take a loss so they’ll rent at the rate that gives them the expected return, which they get because of the high demand they helped create, with rental prices justified relative to the sales price that they themselves jacked up
When investors build with the intention of renting, they typically build at higher density. The only real barrier producing artificially high demand are policies preventing high density building. This is also the thing which makes housing an attractive investment option in the first place. Improved policy will fix both of these problems.
Building more will inevitably fix the housing market, even if one investor owns every single new house.