This is a regressive tax. It forces higher taxes on renters (as a class, less wealthy than homeowners) than homeowners.
The point of this "margin" you mention gets rather deterministically and uniformily raised across the board.
I don't understand this. The owners have pay mortgage, taxes, insurance, and repairs. How can it be decoupled? The landlords I know would have to sell if they lost their renters, or if the rental income fell below a certain amount.
The landlord either eats the loss or gets out of the game. Since vacancy is the worst possible outcome for a landlord, they can't just hold their units off the market to get the price they want.
It's not a perfect market, rents are sticky, landlords don't profit maximize all of the time (e.g. they might keep the rent the same for several years for good tenants), but in general landlords will charge the highest amount they can charge at all times regardless of what their cost basis looks like.