I think the problem here is assuming terms like stable and volatile equate to better and worse. A lack of rent controls will definitely result in price changes occurring based on supply and demand and therefore much more frequently than with controls. So in that respect they're more "volatile" At the same time that market is much healthier because the prices are transparent and all economic agents can act rationally (My rent goes up 10% each year I'm here that's going to be a back breaker in 2 to 3 more years if this holds up so I'd better start planning a change) Controlled prices might be more stable because they don't change but underneath the surface that volatility is still there and building as it has no pressure valve for release. I'd rather my volcano constantly releases gases and shakes my house occasionally than sits under a cap and gives me no warning sign until it blows after 10 years of building up.
The claim was that markets without stabilization eventually stabilize. However, from what I've read, the markets studied continue to be more stochastic for the long term.
I really think you should look into the research. There's a lot of tested hypothesis and survey analysis in them.
We tend to not treat economics like a science - as if our general education is enough to have an informed opinion. We certainly don't do that with psychology, chemistry, biology, or even softer sciences like sociology and anthropology.
But yet, when it comes to economics, we all have a pretty solid opinion and think we are all fairly well informed.
I encourage you to look deeper into the topic. Attend proseminars at your local university. Watch some graduate level lectures online. And, this is just an encouragement, revisit statistics and calculus --- you'll find out why if you look into 21st century econ.
I've never heard it claimed that getting rid of rent control was a way to stabilize the housing market until this thread. I have heard that rent control creates severe housing shortages, insane competition for existing apartments (like having a renter's resume in SF), and lower quality housing for everyone. To me, it seems you've defeated a strawman.
Sorry, I'm not making this out to be competition. We all come to this discussion with different backgrounds. I'm fascinated by economics. So when I see claims that really aren't backed by the literature I feel obliged to bring it up.
As far as your other claims ... those are harder to measure really.
Rent amounts is a pretty easy number but things like lower quality (how much lower, what kind, where, is it predominant) and higher competition (amongst whom, using what process, which strategies aren't in play any more) ... well those are much harder questions. The microeconomic topic here is called Welfare economics: http://en.wikipedia.org/wiki/Welfare_economics and in economic theory is the social welfare function: http://en.wikipedia.org/wiki/Social_welfare_function
I'm not saying those broad ideas don't hold ... but defining things like quality and competition can be a much trickier business than price.
And unfortunately, if you are going to approach it as a science, you can't really go off anything other than definition, observation, and measurement.
