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Hypothetical landlord: “All my tenants are now earning an additional $1k per month and nothing prevents me from raising prices. But I won’t raise rents because... reasons.”


Because the apartment next door would be $1000 cheaper and tenants would leave and go there.


Even where there are housing supply constraints, they still can't raise rents by the full $1000/month because that would give tenants $1000/month more incentive to move to a different city without housing supply constraints.




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