Short term easy solution done for political reasons. Not sure how this is going to make more housing units available?
In theory rising rents drive increasing prices and thus improve the business case for building. I'm not saying this is a good idea.
There are quite a few underdeveloped sites around D15 would presumably get built faster if there was stable demand at >1000/mo.
The problem is that 5% gross yield on 1000/mo gives a price of 240k, but AFAIK there are no new builds in the GDA prices as low as 240k.
I guess if the new builds are better than the Tiger stuff there's a chance that private sector renters will displace from old to new, depressing the price of the old stuff to the point where it makes sense for BTL, but the problem is that the older stuff is in mature estates many of which are quite pleasant to live in, notwithstanding the unexceptional BER ratings.