Property investors can decide to never build apartments in such cities.
Then you wind up with a shortage of willing landlords. (See NYC and SF).
Some folks don't think they need willing landlords.
Okay, strike that: some folks don't think they need MORE, not FEWER, willing landlords.
Rent control laws cut the supply to nothing. Willing landlords will NOT build and operate in these areas.
You may not like it that willing landlords are the other party here -- the tuple of (renter | landlord) --
but they are.
An analogy: cities use very high fines for parking in Disabled People's parking.
By removing the benefit to park in those spots (ie. fining people hundreds of $$) -- the supply of non-handicapped drivers parking in handicapped spots is cut, drastically.
Another example: The supply of willing bar owners selling drinks to young-looking people without checking their ID is small. The reason? BINGO, the city made it unprofitable for bar owners who fail to check IDs.
When a city tells Landlords "you're a pain, here -- making next to nothing" -- the supply of willing landlords drops.
The result of rent control laws is A SHORTAGE OF WILLING LANDLORDS. A SHORTAGE OF NEW APARTMENT CONSTRUCTION. CONVERSION OF APARTMENTS TO CONDOS.
Rent control REDUCES THE SUPPLY of apartments. When that supply drops -- like it has in NYC and SF -- what happened to rents? FREAKING HIGHEST IN THE COUNTRY! Because the DEMAND is still there, and growing. But the supply is dropping.
The cities with the STRONGEST RENT CONTROL -- have the HIGHEST RENTS IN THE COUNTRY!
Like hearing that? No? Then you cannot handle the truth.
Here's from the article:
The long term effect of these laws (rent controls, restrictions on AirBnB etc) is already clear. Sweden already has these policies. Just look at Sweden to see what the future holds.
Sweden has rent control. This causes the existing housing to be converted to AirBnB and rentals to be converted into condominiums. It also makes it more worthwhile to put investment money into owner-occupied housing than build new rental apartments, as owner occupied housing isn't subject to price controls.
Almost 90% of Sweden's local government areas now report a shortage of rental apartments. This includes countryside areas and small towns. Students cannot get into university because they cannot find housing, or have to queue for years.
In Stockholm, you have to wait for 10 years on average in a government queue system to get just the chance to apply for a rental apartment. It is a similar story almost everywhere else in Sweden. In 2013, one woman waited for 28 years to get her Stockholm rental apartment.
Berlin is already starting to see some of these problems with large crowds of competition for apartments at viewings etc
And by this simple observation, we have found the answer why the property owners wants to keep the rent control in place.
How do startups even afford to live there?