You're forgetting there is supply and demand as well. If there are more places to live than people who need them, then landlords and property owners will have to compete to offer the best price. This would drive prices downward, even if everyone has an equal constant added to their income.

Then there's the possibility of some people working less or quitting one of their 2 jobs so they can enjoy their life a bit more. So their actual income could remain flat. If enough people do this then landlords wouldn't be able to increase rates either.