The fact that there were profits to be made by owning a house and renting it out, even if those profits used to be smaller, is itself the problem. That $400 exceeded the cost of maintenance and property taxes (if any) that the landlord paid. That's profit a landlord is making for doing no work. You know what happens when you can accumulate money without putting in work? You can freely invest that money in more capital to make even more profits ad infinitum, and the rate at which you can do this isn't bound by the rate at which your labor power replenishes.

In total, that system creates a process where landlords and all others who own capital can have unbounded and relentless growth. It's not fundamentally different from the factors at play that allow an industrial entrepreneur to start a business expending coal, labor power, and thread to make textiles, turn a profit, and expand that business; over several hundred cycles of production that process culminates in that industrialist (or their heirs) amassing an incredible amount of wealth and even a monopoly.

In either case, it would be insufficient to look at the system 200 years in where the rot had already set in and say that the problem is the system in that instant. No, the problem existed before. There is no time and place for rent and landlords or capitalist exploitation of any kind.

Where could you rent a house for $400 in 2012?