I agree with the sponsor that the activities are alarming, but I feel a vacancy tax is the best option. Banning foreigners from owning or renting more than one property strikes me as overly crude as well. It might in fact harm development in some corners of the housing market, particularly high-rise developments in big cities.
Putting away the sledgehammer and taking more considered action will produce better outcomes for the region.
There are numerous ways we could stop a hypothetical bubble from taking shape. Upzoning would be more helpful than this.
Did you envision a vacancy tax applying in a general context, or specifically to these sorts of investments? In either case, isn't there a concern that these equity firms could still turn properties into rental units quick enough that the vacancy tax wouldn't apply?
With regard to foreign investment, while it undoubtedly does enable the construction of some housing, it also is driving up the cost of housing a lot in many metros where it is already expensive to live, and is often used to make ill-gotten money abroad into "clean money" here. It has occurred to me that existing investments should probably be grandfathered in, but I don't see the housing market as something where we need foreign investment.
I agree upzoning would be helpful, but establishing a region-wide zoning policy applicable across the entire South strikes me as quite daunting.