First of all, there's a really good chance you have the causation wrong. Some city gets really popular, people want to move there, density increases some pittan

First of all, there's a really good chance you have the causation wrong. Some city gets really popular, people want to move there, density increases some pittance, and boom, increasing density just caused a massive spike in prices. And second, today's luxury condo will almost always become tomorrow's "affordable" housing. Developers build something new and shiny matching all the trends, get their money and leave. When whatever style of countertop they are building now goes out of fashion, that place will be nice and cheap. And lastly, even if that didn't happen, moving someone out of somewhere and into a "luxury" condo, still opens up the housing below. Even if it's someone new moving to town, they are still moving into the new condo, not fighting for the existing stock.