[jeffreyrogers]

If one landlord defects and charges $1250, then they all have to do the same, as long as housing supply isn't constrained. Then if another landlord defects and charges $1100, all the landlords have to switch. In theory at least. Obviously the rental market isn't very liquid, so prices can lag and you can have distortions that persist.

I realize that housing supply is constrained in many areas, which complicates this analysis, but in many areas that is more a regulatory failure than a necessary condition.