The legislation, known as the Homes for American Families Act, would amend the landmark Sherman Antitrust Act of 1890 to make it illegal for investment funds with over $150 million in assets to buy single-family homes, condominiums or townhouses. It doesn’t apply to homebuilders that are constructing units for sale.
It disincentivizes speculative holding and buying up inventory to reduce supply without demonstrated demand. Large landlords are willing to sit on vacant inventory in order to keep market rates high. By penalizing holding unuts vacant, that should incentivise either setting more competitive rents, or selling/not buying excess inventory.
In markets where there is a true undersupply of inventory and there aren’t vacancies then, yes, this policy wouldn’t have much benefit.