Why may a municipality enact rent controls?
Sorry, can't resist - NOT an "approved" answer, I'm sure. BUT, it's because the citizens allow it to control them.
Any time any government organization interferes with the normal conduct of the citizen's activities - except where a such action promotes general safety or enhances the ability of the citizenry to conduct its affairs - is an excess of its authority. They should never be meddling in the commercial markets.
But if the society allows the action, the municipality rulers will be happy to assume more control!