Will this move solve the problem? No, but what alternative are you comparing it to where it fares so poorly?
I suspect even the staunchest proponents of unregulated construction of denser housing would only claim that it mitigates the problems of housing affordability, not that it solves them. This new STR policy could be one of many pieces of the puzzle.
That said cities across the developed world are struggling with housing, even ones that are not popular with tourists. Why it seems no one can build anymore is what is interesting.