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Notes -
There are three main reasons, as I understand it, why many economists think rent controls drive up rent:
When renting to a new tenant, the landlord has to set the rent based on the expected market price over the next, say, 10+ years the tenant may occupy the property, instead of setting the price for the coming year knowing it can be raised later. This raises rents.
A rent controlled apartment is effectively an asset that gets more valuable the longer the tenant holds onto it. This reduces apartment turnover, which reduces supply, which increases price.
Rent control makes building new housing a less attractive business model, so fewer apartments get built, thereby reducing supply and increasing price.
A fourth point (e.g. relevant for the Swedish rent control system) is that if the maximum rent is based on templates like how much rent may be set based on furnishings and access to services and so on, then that creates a strong incentive for landlords to provide the cheapest possible amenity that still meets the legal definition of the thing.
This means that shortly after rent control is enacted, landlords goodheart the regulation to the max by erecting the smallest possible "park" in some unvisited corner of the plot, or modify the building so that there is technically an "ocean view" if you stand on some exact spot and use binoculars.
In the end rents don't decline, and the costs of the modifications is susequently partially borne by the tenants, either in increased rents or worse quality of the amenities they actually do care about.
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