Rents are set by only two things: 1) the tenant markets’ ability to pay and 2) competition with other landlords.

If every single landlord knows with certainty (2) that every single tenant in their market has increased their ability to pay (1) by $1000/mo, then every landlord independently will come to the conclusion that they can raise rents by $1000/mo.

They know the tenants are able to sustain it, and they know other landlords know the same thing.