> not clear that you can meaningfully effect availability of "regular" housing by building any reasonable number of luxury homes
Most of New York's affordable housing is former luxury townhouses subdivided. You saw similar subdividing in Phoenix post crash. Every time people study this, they find building housing–any housing–eases prices. Yet every time a debate about building housing in high-cost areas comes up, someone comes out with this and throws a wrench in the gears. (The marginal property in a high-cost area will always be luxury. That's what high cost means.)
Anecdote: I've negotiated down my rent in New York based on new luxury developments nearby. I tallied up the cost of their amenities, saw how much I spend, compared the floor plans and showed my work to the landlord. Two units had already left, and I knew one had sized up to the luxury. Based on the math, it made sense–$200 for far more square footage. Landlord delayed but eventually agreed and reduced my rent to keep me.
Most of New York's affordable housing is former luxury townhouses subdivided. You saw similar subdividing in Phoenix post crash. Every time people study this, they find building housing–any housing–eases prices. Yet every time a debate about building housing in high-cost areas comes up, someone comes out with this and throws a wrench in the gears. (The marginal property in a high-cost area will always be luxury. That's what high cost means.)
Anecdote: I've negotiated down my rent in New York based on new luxury developments nearby. I tallied up the cost of their amenities, saw how much I spend, compared the floor plans and showed my work to the landlord. Two units had already left, and I knew one had sized up to the luxury. Based on the math, it made sense–$200 for far more square footage. Landlord delayed but eventually agreed and reduced my rent to keep me.