The somewhat informed argument is that a few per cent of well-paying renters drive up the marginal price, and landlords try to stay close to the marginal rate.

You'd intuitively think this is true, but empirically it has not been true anywhere ever.

Rising productivity yields rising inequality. The issue is that land rents rise to swallow all productivity gains (we end up calling this "cost of living," as if it emerges out of the ether).

That's why in ultra-high productivity locales like Palo Alto, $200k/yr is a welfare wage. The land is ludicrously expensive because those prices rise in lockstep with productivity -- which they don't have to. Land costs nothing to exist. It is there ready to be used no matter what the price is.

But everything on the land, which is everything, must then pay rent to the landowners, giving rise to "cost of living."

You can disprove this by showing me a location with high productive power and low land prices, or a location with low productive power and very high land costs (that's not abandoned or a vacation spot for highly productive people).