Sounds easier to just outlaw investor from owning houses they don't live in themselves. Seems we can't really stop collusion, only real way to win there is to not make that possible in the first place.

Investors add to demand for housing. This will help drive up prices. And no, builders will not necessarily increase supply if they can realise increased margin of profit due to increased demand. We see that with RAM manufacturers. RAM suppliers constrain supply to boost margins. Same with house builders. The difference is people can go without RAM but everyone needs a place to live.