>Those that could afford to lower prices to outcompete others probably already did so.
Why on earth would you assume that a landlord charging market rent would lower their prices when there's nothing forcing them to?
>As a result I don't see how we can expect landlords to eat the cost instead of passing it on.
Heavily leveraged landlords would be able to pass the costs on in the form of defaulting on mortgages. Non-leveraged landlords being forced to eat the costs would likely be very unhappy about being forced to "eat the costs" (lose their stream of unearned income), but they would have few other options. Violence would be a significant possibility.
Why on earth would you assume that a landlord charging market rent would lower their prices when there's nothing forcing them to?
>As a result I don't see how we can expect landlords to eat the cost instead of passing it on.
Heavily leveraged landlords would be able to pass the costs on in the form of defaulting on mortgages. Non-leveraged landlords being forced to eat the costs would likely be very unhappy about being forced to "eat the costs" (lose their stream of unearned income), but they would have few other options. Violence would be a significant possibility.