The higher density seen in the upmarket development isn't necessarily an indicator that land values in the area are high, or that space is at a premium. Rather,

The higher density seen in the upmarket development isn't necessarily an indicator that land values in the area are high, or that space is at a premium. Rather, it correlates with the developer's belief in achieving a higher return from the development (despite the increase in construction cost) vs. building out lower density. Despite the two places meters apart and separated by a fence, it's the amenities of the upmarket development (e.g. degree of repair, safety, security, facilities, prestige) that makes it valuable, but only in an improved state after the fact. In places where upscale market demand isn't overwhelmingly high, this keeps land prices low enough that residents of nearby low-class housing aren't priced out, or the landowner (who may or may not be the resident of the dwellings above) doesn't feel sufficient pressure to sell.