Once a price cap is established, it becomes harder for landlords to justify investing in upkeep of their properties if they don’t get to see reward from such efforts in the form of being able to charge higher rent. In the more extreme cases, the inability to charge market prices compels landlords to pull their properties from the market. This pressure on landlords has a two-prong effect over time: it reduces both the quality of the current supply and the quantity of current supply.

It gets worse. In some cities, such as San Francisco, a recent jump in apartment fires has raised suspicions that landlords are burning down their own buildings in order to avoid having their units subjected to rent-control restrictions. As reported by CBS SF Bay Area, “A fire could be a lucrative disaster for a landlord owning a rent-controlled building, the report mentions. Insurance covers the rebuild and tenants who don’t move back in, either because they died or can’t wait for reconstruction, makes room those able to pay market-rate rent.” While it’s very hard to prove arson, the fact that an economic system creates a possible incentive for people to destroy their own property spells disaster long-term.

Rent control also affects demand for apartments, as well. When the price of something is artificially depressed and doesn’t reflect the product’s scarcity, it tends to create a too-high demand for the actual availability of apartments. This fact translates into long waiting lists for rent-controlled apartments and general housing shortages.