The theory behind it is that 1) economic growth generally accrues to land values so distributing land ownership is one way to distribute wealth and 2) people generally treat the things they own better than the things they rent or consume.

Incentivizing ownership is more closely aligned with objective (1) while owner-occupancy is more closely aligned with objective (2).

These don't work in the presence of capital's outsized returns though, which allows people who (for whatever reason) have access to more capital to recursively seize more of the growth in land values from objective (1) and therefore price out objective (2).