A new rent control law changes the market. If the tenant leaves, they will need to sign a new lease, and the leasor will build in extra rent because they are worried they won't be able to raise it enough later.

In other words, it scares all the landlords at once, and they all raise prices a little because of it.

It all depends if tenants can afford it. On a scale this could be "happy with rent"->"rent too high but can afford"->"cannot afford rent, in arrears".

Are average renters getting 7% pay raises every year in perpetuity?

> It all depends if tenants can afford it

In extreme markets, perhaps.

Normally one landlord's ability to raise rents is constrained by the prices other landlords charge.