Chop the size of government, Federal and state, significantly and see what supply and demand do to those rents.
New York City, San Francisco, Los Angeles, Boston, Chicago...all of these have sizable federal employee populations and their high cost drives up the average compensation of the federal employee. I doubt that government employment drives up much of the property value in these locations.
DC, I’ll give you, as no one in their right mind would want to live there, otherwise. Although, if you’re a certain color, you can live quite cheaply in DC, as long as you don’t mind fearing for your life most of the time.