Yes large investors and institutional investors can very much create both false and real shortages
Across the U.S.’s red-hot competitive housing market, real estate supply shortages are being exacerbated in a majority of the largest cities by property investors.
www.realtor.com
Because so few homes are for sale they can drive their own profits
In my area large/ institutional investors basically write their own zoning changes .
The town used imminent domain to raise an entire city block of occupied mid to higher end homes.
Shortly after A for profit landlocked “care” facility downtown purchased the entire city block of now “vacant” land from the city for a song as part of a development to make a gated community for people in recovery.
In a “water locked” area with 30 homes for sale a month in the whole county removing 25 houses from the market is a huge blow since they cannot be replaced.