^ If we were forced to take on rent control, a model such as yours would probably be the best way to go about it.
However, the devil is in the details, and my impression from my 42 years on this earth is that Governments do an incredibly lousy job of addressing issues in a timely and fair fashion, and often at a whim can penalize or scapegoat certain classes of people just to get votes. So I'm quite skeptical.
For example: does this "application process" take forever? How bad is the bureaucratic red tape? Is it corrupt? (Remember, I'm in Chicago...). Can you even get somebody on the phone if there is a problem? Do lawyers need to be involved (increasing your costs more and more, hence what's the point?). What happens if there is a wave of populism and some racially-motivated Aldermen decide that they want to alter the regulation so that it pinches landlords even further?
You see, once you open Pandora's box--a new regulation--it rarely stays the same. It snowballs and can become more and more burdensome, more politically charged, and more of a tool with which to elicit quid pro quo.
Hence it sounds nice in theory, but in Chicago it absolutely could become a nightmare.
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