When I first read about this I freaked out. But I'm starting to think it kind of makes sense.

"We looked at the actual usage of those properties and we thought of a way that was fairest. The trouble with this (bill) is that it says residential property means property used primarily for the owner's residential purposes. It excludes use of property the owner has acquired for commercial gain," Neilson said.
That seems kind of fair. People who rent out property are generating income from it, and in that sense their additional property opperates as a kind of business. Zoning it as such seems reasonable.

The obvious concern is that it will drive up the cost of renting. However, won't it deflate the property ownership market?

The bill makes renting out property more difficult, and probably less appealing. Won't people be less inclined to purchase multiple properties? And if so, won't property values decline with lower demand, making it possible for more ordinary people to become owners?