Critique the argument against rent control and explain why the logic presented is faulty. Also, explain why a decline in real estate would not necessarily cause landlords to start losing money.
Your logic is ridiculous - if rents were to become cheaper with no controls (which of course, they haven't), then what's the problem with a 2.5% cap?  According to your argument, landlords & developers are better off with rent controls.
And I fail to see how a decline in real estate would cause landlords to start losing money - their business is based on existing costs (primarily mortgage),  so how does a drop in real estate change things?