A landlord is doing exactly the same thing as an investor. They are tying up their capital in exchange for an income, and the possibility of a capital gain.
The result is that real estate basically sells for roughly what it would cost to rebuild whatever is built on the land.
There is still a premium charged (in the form of LVT) to allocate access to desirable locations, but the revenue goes to the government/community instead of the previous owner. And the eliminating the incentive for land speculation should actually reduce overall costs.
But investment in housing can definitely create more housing, and that is by far the most common type of landlord.
If you genuinely think there is little difference, why do you care so much about not switching to a lease system?