I think its about dealing with the increase. Most people are already thin in margin, having a guarantee that your expense aren't growing arbitrarily each year is FAR better than the alternative.

It's not even ideal for the people who have rent control.

Sure, they have rent that's a lot cheaper than it could be. But, they're stuck. Maybe their place doesn't have enough bedrooms. Maybe it's not near their friends or family. Maybe it's too big for them. Maybe they hate their neighbours. But, they have rent control, and they lose it if they move.

Meanwhile, someone else who that apartment would be perfect for has to look elsewhere.

It's a bad system, but rent in NYC is so outrageous people will fight for the bad system because they doubt anything better is really possible.