The investor's objective is to maximize yield, not minimize homelessness or keep affordability in check. In that, if they don't find a renter for their jacked up rent - they "renovate" the property - get a higher appraisal and sell it to the next schmuck.

Housing can’t both be a good investment and be affordable.

You can't make economic decisions on the basis that real estate will always grow more than income or even real gdp forever. Which is what these group of investors are doing.

> Housing can’t both be a good investment and be affordable

This gets repeated a ton, but isn’t true unless you assume density never increases.

Buying a SFH and replacing it with a 4-plex would be profitable in almost every market — were it allowed, which it almost never is in the US. In that alternate universe, the SFH owner makes money, the developer makes money, and the new units in the new building can be affordable.

Wouldn't they also be oppressively small and bad for mental health (which is already pretty bad compared to fifty years ago)?

No, it would be a taller building.

American new construction has doubled in size (in terms of sqft/unit) over the past 50 years. If “oppressively small” were the problem, things should have gotten better, not worse?