I think i see the error in your thinking. You believe that rent is low-margin and cannot be sustained at a given level if costs rise.

That's never been true anywhere I've lived. Landlords generally charge the maximum the market will bear. In high-demand areas, letting is highly profitable. A London flat, say, will generally net five figures above the mortgage.

LVT is, definitionally, only high in those places.

Does this help you understand?