That's the idea: with cheaper real estate you won't have to put your entire wealth into it, trading it would also be easier, and so ownership would be more attractive option.
Currently I would comfortably put $20,000 in to housing as an asset. I can not see any way possible that banning rentals would allow me to buy a $500k construction cost apartment for $20k.
So this change forces me to invest in a market I do not want to invest in to. Buying one of these apartments is an incredible risk as it will likely devalue over time and be difficult to sell on when I want to move. So every time I move under this system I am risking massive losses Vs just having a weekly price and no commitment or risk.
It doesn't sound like your landlord is doing you any favors.
To buy a property means paying tens of thousands in taxes each time you buy. If I stay here for 2 years and sell I would pay more in just taxes than the entire rent would have been and I am on the hook for any issues with the building or changes in value.
And I am perfectly happy to pay a known weekly amount which is well within my budget and put my savings in to other investments which don't tie me down to living in a particular place, do not require taking out multi decade loans and are easy to sell back for cash later.
How does this decrease my rent? I do not want to own property because I do not want my entire wealth invested in a single asset. For me, renting is ideal and then my money goes in to a wide array of assets which provides a better safety net than expecting that house prices will always stay the same or go up in the future.
Renting also affords me the ability to move whenever I feel like upgrading or downgrading without being stuck trying to sell the previous property and paying insane taxes each time.