The kind of person who wants a 3000sqft suburban home is in a different market than someone that needs to keep the rain off their head and shower before work.

The kind of person who wants a 3000sqft suburban home is in a different market than someone that needs to keep the rain off their head and shower before work. Building dense urban dwellings, especially cheap ones, shouldn't impact the price for better housing much. This is the same reason the availability of paddle boats doesn't impact the price of megayachts.