Rent is high because housing is scarce AND people can afford high rent. Like you say you can't get employees there if they can't afford it, but that also means

Rent is high because housing is scarce AND people can afford high rent. Like you say you can't get employees there if they can't afford it, but that also means that if no one could afford it there would be no demand at that price. Landlords will absolutely try to extract every last drop of economic surplus out of their properties.