I've heard that theory before, but it doesn't stack up against reality. I live in a rent-controlled apartment, about 40 years old, and the owner keeps it up in immaculate shape. No sign of the squeeze on profits that's supposed to result in deferred maintenance and deterioration, no pressure to get me to move to get a higher rent from somebody else. Nor is there any sign of a serious shortage of rentals in the Valley; even with foreclosures and other reasons for people downsizing into rentals lately, there's been only modest pressure on the rental stock.

The idea that people "squat" in a rental because of rent control is another bit of fantasy. In the real world people live where they have to live because of externalities like employment. You can't hang on to even a rent-controlled home if there's no way to make a living in that location. Rent control encourages stability in housing, but doesn't force people to stay in one place.

Landlords do just fine if they avoid the speculator mentality. It's only people who rapidly flip properties who remain perpetually a few percentage points ahead of their latest mortgage, and need to keep ratcheting up the rents to cover their foolishness. A landlord who hangs on to a property will, in a few years time, find himself making mortgage payments that are a bargain by prevailing rates. If the property's rent-controlled there's no squeeze, because income and expenses remain in balance. Only greed can upset the equation and create self-inflicted hardship on the landlord.