In the UK, a leaseholders get screwed if they forget to renew their lease before the 80 year mark.

The cost to develop the land needs to justify the development. If I spent $500k to build a house on the land, I would like to be able to use that house for as long as the house exists (or I sell it to re-coop the investment).

Many people are really bad at saving properly, but they will pay their mortgage. Landownership enables at least some old people to have a cushion in retirement.