You can make the exact symmetrical argument if tenants are not allowed to pick landlords (which is what happen in practice). Well, except about rent increase that happens anyways.

What market are you in where tenents can't pick landlords? With mom and pop landlords, it can be a crapshoot. But I have rented from coorporate landlords twice. Each time, I was able to research them, and I avoided several with bad reputations. I've never had problems with the landlords I did rent from.

Sounds like there should be some symmetrical landlord screening tools.

Tenants cannot pick an arbitrary landlord L for a given, fixed rental unit U. They can pick a different rental unit with a different L.

Tenants pick what they can afford. Landlords charge what the market can bear.

The entirely predictable result is some very rich landlords and some very homeless people.

In reality, stuff also happens such as: landlords working several jobs to cover the bills, unable to get rid of nonpaying tenants.

I don't see how what you are saying makes any sense at all.

>1. Bad tenants will have no incentive not to harm the property and the neighborhood.

Of course they will: they may lose the security deposit, may be evicted, may be sued, and may even be arrested.

>2. Landlords will be forced to pay for insurance to cover all the bad things that tenants are now free to do.

They already pay for insurance.

>3. Rents will rise to cover the costs of the insurance. Conscientious tenants will be penalized.

Building more housing will make housing more expensive?

>4. Even otherwise conscientious tenants will start to cut corners since they are having to pay for the insurance anyway and it’s clearly unfair.

No, for the same reasons I gave before they still have an incentive to behave well.

None of this is a problem because everyone will own their own home.