There are projects that are teetering on the edge of profitability (in terms of cap rate.) Increase permitting times, shave off a few stories, force more units to be below market rate, and all of a sudden those projects evaporate.

Suppose you have a project that's viable if you can rent the units at $X and then raise rents along with inflation. Then the rent control board comes in and limits increases to a sub-inflationary level. Great, just compensate for it by increasing your initial rents. Now it takes you 4 months to fill every unit in our hypothetical property rather than 2 months.