Transaction costs. Moving is not free: at a minimum, there are search costs to find a new apartment and moving costs to pack all your stuff up and move it around. Very often, there are also storage needs, and if you move non-locally, there are jobsearch and job termination costs, recruiting costs by their employers, relocation costs, etc.
Many of these are externalities - they're born by people who are not party to the transaction itself. For example, if one of your best employees is priced out of the city where your office is, then you need to find a replacement in a hurry. Replacing a key employee can sometimes cost as much as their yearly salary (this is why the recruiting industry exists, and why startups can get "acquihired" for a million or so per engineer). If the employee has a long tenure and lots of domain knowledge, they may actually be irreplaceable, and their loss could permanently damage the business.
The cynic in me wonders if the reason we have rent control isn't to protect tenants, it's because one powerful constituency (employers) is pitted against another (landlords) and the former is currently more powerful.
Many of these are externalities - they're born by people who are not party to the transaction itself. For example, if one of your best employees is priced out of the city where your office is, then you need to find a replacement in a hurry. Replacing a key employee can sometimes cost as much as their yearly salary (this is why the recruiting industry exists, and why startups can get "acquihired" for a million or so per engineer). If the employee has a long tenure and lots of domain knowledge, they may actually be irreplaceable, and their loss could permanently damage the business.
The cynic in me wonders if the reason we have rent control isn't to protect tenants, it's because one powerful constituency (employers) is pitted against another (landlords) and the former is currently more powerful.