> But that's fine, because when you build more high-end housing, then people move up from slightly lesser housing, making that housing available for people to move up to from even lower-end housing, and so on. This eventually makes housing available at the low end of the market for people who couldn't previously afford housing at all -- or perhaps for the government to rent on behalf of homeless people at an acceptable cost.

This doesn't happen here in the South. I'm aware things are different elsewhere.

What happens is that the historical small / older single family units (i.e. ~50-100 y.o., 1500 SF) are demolished one by one to make room for the highest end housing that can be sold. This occurs across the board. You have teardowns of recently renovated houses that are replaced either by multiple copies of "tall skinny" units (larger size, and upfitted with all the granite etc) or, if the lot can't be carved (or if the area is especially high end) you end up with mega-houses that take on the entire footprint of the lot and go for well over $1M

In all cases the new units go for multiple times what the old house would have gone for a few years ago.

I know why people want to live in places like this. As the density increases amenities are added that make it walkable and pleasant. Now grocery stores can be supported, coffee shops, breweries, etc., which are close enough either to walk to or a short drive. These are the sorts of businesses wealthy out of staters crave. They were not supported by lower income, less dense single family housing.

The roads in these older neighborhoods are ill prepared for increased density, and of course traffic bottles up. This makes it even more imperative that, if you work in a physical office and desire a short-ish commute, you need to buy expensive units that are centrally located. Remote working white-collar and tech workers (with full pockets from selling their homes in even higher value areas) move near the city centers even though they don't have to commute anywhere simply because they want the amenities involved.

Wages for "normal" people who grew up in the region, meanwhile, stagnate. Places that are near the physical locations they go to work are now occupied by wealthy out-of-towners. For locals without the means, they are increasingly pushed to the outer limits of the sprawl, which develops in increasingly distant rings around the urban centers. Commute times start to become stratospheric.

Southern cities almost universally hate public transit, so the congestion builds upon itself, making the QOL consistently worse for the people forced to move further and further out.

I don't have data about how adding more housing designed for rich people enhances this cycle, but I bet you have no data on how adding more housing designed for rich people will do anything to mitigate it, either.

More units are good theoretically, but almost universally people latch onto the deregulation component and fail to advocate for affordability requirements tied to it. If one out of every four "tall skinny" houses was made available at well under market rate to local, low income renters (think something like Habitat for Humanity) then maybe you start getting somewhere.