I think the "empty houses" isn't all or nothing. A house used for an AirBNB results in empty hotel rooms, and is "less full" than a rental that is rented for the whole month. Likewise a large house, with a single occupant is less full than an apartment building on the same land with even a 50% occupancy rate. This is the whole "missing middle density" comes in.

My impression is that developers would rather buy a bunch of land, throw up some upper scale housing, sell it, and move on. You are right that building an apartment building and renting it out is also a viable investment strategy, but it just seems that there are more developers selling houses than landlords building apartment buildings. Granted landlords kind of suck to, so condo's would be better I would think, but what do I know?