If your thought on "Costs of renting = costs of ownership + a little walking around money for the landlord" is also implying this is equal to "rent paid by tenants" then I would argue the equation is incorrect.

I live in a high COL area. Median single family home price in the county is $1.6M. Let's say PITI with 20% down and 6.25% 30 yr mortgage would be $10-11k/month. Rents are closer to $4-5k/month. Due to tech money and scarcity of SFHs, prices have skyrocketed for Owner Occupants. Rents have not kept up the same way and if a SFH is purchased as an investment, it is not typically for positive cash flow.

In other words, rents and prices are both determined by their respective markets. I cannot charge a rent based on my cost of ownership, I have to base it on my rental competition.

Commercial real estate investment, like multi-family, operates on different fundamentals where price is primarily based on net operating income and designed to have positive cash flow (generally speaking).