The problem is that we are already doing 1 regardless of rent control.

Here there was a proposal to do a couple hundred units of entry level apartments and people shit their pants about it. It was about a quarter mile from the already poorest part of the county and people actually went to the planning commission and said stuff about not wanting the poors around there. One landlord basically argued he didn't want the competition.

In the end the state subsidies fell through anyway.

> Why do governments go this direction when it causes so many problems?

I think it's fair to say in a democracy most politicians are motivated by money or votes. There are plenty of people who probably see this as working in their favor.

> 1) fewer new homes will be constructed

Next usually comes the affordable housing bond because you're right, the private sector won't see it as a good investment.

Market economies work great in textbooks under idealized conditions of perfect competition, where all participants in the market are fully informed and have the option to enter or exit the market freely. In reality demand for housing is highly inelastic, significant informational asymmetries exist, the market is fundamentally constrained by the supply of land and the varying demands resulting from demographic change, and other factors.

Economic analysis that does not take these factors into account is not worth very much. It also fails to offer any useful solution for the underlying problem of rents rising faster than incomes.

> the market is fundamentally constrained by the supply of land

And constrained by how the government allows that land to be used.

I'm going to predict that governments go this direction because of all the problems the housing market economy has caused.

Such as?

Massive housing price inflation relative to median incomes, for one, which the popularity of real estate and rental property ownership as an investment/speculation tool has greatly contributed to.

I'd argue it's the lending market and tax incentives, not the housing market.

The lending market is designed to encourage spending and making higher offers. It brings new people into the housing market faster than they should be entering.

The tax breaks around owning a home encourage you to live there for 3 out of the last five years. There are also realtor fees that discourage you from selling. This, along with housing values appreciating discourages people from selling. When my home is appreciating in value, it makes it more attractive to buy as an investment or rent it out while I buy a new house.

If you encourage people to buy and discourage them from selling, you're going to get a high demand / low supply situation pretty quickly.

If you eliminate the tax breaks and reduce lending, you'd have a pretty balanced market.

But who wants to be the politician responsible for slowing home value appreciation?

There's a whole article which we are commenting about a rent-control policy being passed. Why don't you consider the reasons stated for its passage in the article, instead of asking people here to restate them for you? Sealioning isn't a good way to have friendly discussions.

All the reasons listed in the article...

Market economies don't always result in higher prices. That's plainly obvious. Maybe it's something else?