It’s an idea that could work in a perfectly competitive market, but there are far too many ways in which housing is not perfectly competitive for it to work here.

It could probably be improved a lot if there were a blanket increase in zoning. One of the problems is that currently most of what we’ve got is either the extremely inefficient low density zoning, or the extreme other end of the scale with tall inner-city apartments. Tall apartments are logistically very difficult and expensive to build, so they only get built when they can get maximum profit. That means few get built, and the developers have every incentive to try to get permission to build as many storeys as they possibly can.

If we instead blanket increased all our zoning to allow for medium density, it would be affordable for more people to develop in that area because medium density is logistically much simpler and cheaper to build, and requires less investment. And by making it such a large blanket change across all of our low-density at once you decrease the ability for a small number of landowners to "land bank" to drive up prices. It pushes the housing development market a little bit closer to that perfect competition and away from oligopoly. Still a long way from a true theoretical perfectly competitive market, but better.