[eru]

Individual people would likely not negotiate themselves directly, because they are not lawyers. But they would take contract terms into account when comparing places to rent.

"700 USD per week" vs "800 USD per week and rent increases limited to 7% a year" are relatively straight forward things to compare.

You are right that landlords have a limited monopoly power when people have moved in. (And depending on market conditions tenants also have limited monopsony powers, because it's a bit of a hassle to find a new tenant.)

But those kind of longer term engagements are pretty common in the commercial world. And they are often solved with contracts.

What's keeping people from coming up with those terms themselves?

Note: I am not suggesting that landlords agree to those terms out of the goodness of their heart. They would offer such a ceiling on the increase eg in return for a higher starting rent. They are essentially selling a call option.

If they price the option premium right, they would make money. Just like any other kind of extended waranty you can buy.