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Rents are capped at the amount people can afford. If you earn €1000 a month as an artist, you can't pay €1500 a month in rent, no matter what supply and demand curves say.

Say there's a supply on 100 apartments and a demand from 120 artists. 100 will pay €1k per month, and 20 will have to leave the city. Landlords can't increase to €1050 a month because nobody can afford that.

If demand is higher than supply, rents will increase, but if the demand is entirely from people earning €1000 a month those rents won't increase past €1000 a month.

However you have a demographic on €5000 a month move in, they can afford higher rents. The same 100 apartments exist, and there's a demand from 120 people, but now those people are earning €5k a month. Rents thus shoot up to take all the money that can be spent on rent, because the alternative is moving out of the city and thus not being able to earn the €5k/month.

The people owning the property do well in this situation, and thus don't want supply to increase to the points that there is more supply than demand



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