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I thought this might be BS because it is definitely formatted to cause outrage. But there is currently a listing on Estately updated yesterday for the higher price but older references to it shows the lower price. It looks like they pulled all the ads they could though.

How are you a landlord if you only own one house? Surely you mean two houses. Unless you rent.

As a landlord (with only one house) I do not understand why a landlord would raise the rent unless they need to.

You don't understand because you're not a sociopathic "line must go up, moar profitier to infinity and beyond" asshole.

If I charge $675 a month and the competition jumps their price to $1,000 a month, who is everyone going to come to?

You will get, among others, people who can afford $675 but not $1000. Compared to people who can afford $1000, people who can afford $675 but not $1000 are more likely to find themselves or already be in a precarious financial situation, which could mean missing rent payments. Compared to people who can afford $1000, people who can afford $675 but not $1000 are also more likely to suffer from mental illness as a consequence of their more precarious financial situation, which could mean neglected facilities, conflict with other tenants, pests and a host of other issues for you, the landlord.

You may be willing to both forego higher rent income and assume the increased likelihood of financial losses, and that would make you a good person, but not everyone is — at least not to the extent necessary to make that choice.

If the competition suddenly goes to $3,000 a month and I stay at $675, and I maintain my place so it isn't a shit hole, I'll have lines around that block of people wanting to rent.

Given the housing crisis in many of our cities and towns, you likely already have loads of people ready to rent your property, with enough reliable tenants among them. More applicants won't benefit you, because you already have enough reliable tenants. What are you going to do with all the additional applicants? Screen each and every one of them to pick the very best one? One that is marginally more reliable than you would otherwise have found?

In fact, raising rent and prices often serves as a sort of ‘customer filter’. Instead of screening your applicants in depth, you can just check their financials and safely assume that whoever can afford a monthly rent of $3000 is also a reliable tenant.

You seem to assume a rental market made up of individual landlords. Although that is a reality in some places, most properties are rented by for-profit corporations. Such corporations compete against each other for capital; they need money from investors and investors want returns. Whenever such a corporation foregoes profit, another usually takes it and uses it to expand, often acquiring its smaller peers. Over time, this sort of natural selection yields the most ruthlessly profitable corporations.

The problem here is not that individuals make the wrong choice, but rather the framework in which they operate, the systemic incentives.

Supply and demand.