What drives rental rates?

[Brad E.]

Where I invest (college town) there is higher demand for rentals. Other than the obvious laws of supply and demand, what other economic forces put pressure on rent prices, both up and down? Thanks for any insight you can share.

[David Faulkner]

Originally posted by @Joseph M.:

In some cities like Los Angeles , NYC and San Francisco government imposed rent controls affect rental prices . Besides that I agree it's going to be simple supply and demand .

Supply and demand still drives market rents, even (and arguably especially) in rent controlled areas. What typically happens in rent controlled areas is those restrictions end up restricting the supply of available rental housing, which ironically drives market rents up even further ... not to imply that it is illegal, but it is kind of a kin to outlawing drugs doesn't stop drugs from being bought or sold, but it does drive the market value of those drugs up. Market supply and demand always drives pricing.