Nah, what actually happens is the lower rung housing is either flipped to capture the increase in area pricing or the lot gets scraped, again to capture the increase in area pricing.
This is absolutely false, not true, disproven, and made up.
Social housing builders are good for many reasons, 1) they provide competition to the public market, and when efficient don't need to return profit to shareholders so provide a very good competitor in places like Finland and Singapore, 2) social housing builders smooth out the business cycle, because new housing is needed just as much when at the downturn of the business cycle as at the top, so it greatly helps provide stable employment and a stable workforce for housing construction, greatly improving housing.
But the idea that new idea drives up housing prices in any way is, at best, a fiction. It's mostly a lie from landlords and homeowners to try to justify their continued extraction of profits from their idleness.
Someone should tell the local housing market that then, because this pattern has consistently manifest over the last 20 years here. Without exception everyone I've seen make this claim isn't invested in residential real estate and hasn't closely watched how prices shift in response to new construction. In any event if you're trying to advance the claim that gentrification is a myth you're going to need to bring some serious proof to back that.
https://news.ycombinator.com/item?id=44914153
It is rather fascinating that you would bring up a "gentrification is a myth claim," why would you try to insert that into my mouth?
Gentrification happens all throughout the US, but in the current era it's from the under discussed type from the original literature in the 1970s: through lack of construction. When there's not enough housing to go around, prices rise, wealthier people are the only ones who win the bidding war, etc etc. See Boyle Heights in LA for a classic example of this. No new buildings, massive gentrification because there's not enough housing to go around.
See also in LA for the neighborhoods where prices are not rising: the only places they are building lots of apartments.
Perhaps there was some era when the "rent gap" style of gentrification was actually prevalent, but it hasn't been that way for decades. It's all just shortage driven gentrification in every example I have been pointed to in recent times.
Sure, as with every other good.
But there’s a long way to go between current property prices and raw construction costs.
How much? Searching a bit suggests that net profit margin in housing industry is about 8.7%
Consindering an investor can get ~3.75% in zero risk T-bills without lifting a shovel, that's about an extra 5% net profit to get involved in building housing.
Which isn't nothing, it's a decent profit. But I also wouldn't call extra 5% a huge difference.
