Higher profit risks mean that I’m going to charge more. If it doesn’t make sense for me to invest in real estate, why not invest in something else? How does that help reduce housing costs?

If the regulations change, all landlords that have any business acumen are going to address that by raising rent. The entire market is going to change.

Exactly, that's the entire point. If landlords are less willing to invest in property the housing price will drop, making it easier for people to buy the house themselves.

People don't want a landlord, they want a home. For many people the landlord is currently a necessary evil they'd rather get rid of.

No the entire market is going to change and if I know my risks are going to change, I’m going to increase rent.

It’s going to increase prices and/or reduce supply as not as much capital flows in.

People may not want landlords. But everyone doesn’t want to own a home. By definition, they want to rent from someone else - ie have a landlord.

This wouldn't magically create rich tenants in your city.

If you can really do it then why don't you simply increase rent right now?

The market conditions as they exist today with the known expenses has established an equilibrium. When expenses go up or risks go up across the market, the market adjusts.