Examines the economics of owning and operating rental property from the viewpoint of the landlord in two midwestern housing markets. Increased cost factors during the time of the study (1973-1977) included greatly increased energy costs, price of repairs, and a sharp increase in operation inputs (labor). The prices of capital and land fell during the time period. The portion of gross rent that landlords receive for owning a property constitutes a relatively small fraction of their equity income. Landlords in both sites made most of their money through appreciation in property values. Tax benefits help wealthy landlords and do not help the poorer ones. Subsidies that lower capital or operating costs for all rental properties succeed in treating comparable households similarly. Housing allowances provide benefits directly to needy renters. The benefits reach landlords as reduced vacancy losses, fewer bad debts, or in tight markets, higher rent levels. By increasing rates of return in the lower part of the market, housing allowances concentrate growth in supply, where it is needed most.