I get the chain effect, but because of the scarcity of land zoned that way, the buildings that are currently the bottom end up torn down rather than rented for

I get the chain effect, but because of the scarcity of land zoned that way, the buildings that are currently the bottom end up torn down rather than rented for less, and the land re-used because the base value of the land doesn't allow the rent to drop. So you see drops across most of the market, except at the bottom. This market effect is actually good! It keeps land cycling to be productively used and everyone gets to live in a nicer place. The problem is we need to rezone land to drop the value of highly dense land, so those low end apartments drop a bit, rather than being repurposed. (At least, until cities are rebalanced a bit.)