If, as a landlord, you know you can never raise the rent, and you can't evict a tenant except for very limited reasons, well then you have your own internal set of screening criteria and you only take the most qualified renters. It's far better to leave the unit empty for a few months because the loss of rental income is tiny compared to the financial loss of choosing the wrong tenant.

i see your point but i don't think this is true. i believe that bad tenants are uncommon but exist at all price levels. raising rent is not going to keep them out and they will have to be screened anyways.

i don't know how rentcontrol works elsewhere, but in germany generally it means that rent can't be raised more than once a year or 15 months or something in that range, and it can't be raised more than a few percent each time, but it doesn't mean that it can't be raised at all. not being able to evict a tenant is independent of that.

the general issue here is a power differential. big company vs small family. i know in the US there are more small landlords who only have a few houses or even one. but that is rare in germany. most are bigger businesses with hundreds of apartments, and with that the risk of getting a bad tenant is obviously larger, but the financial risk is also spread over all tenants.