You're speaking as if there's a one-to-one relationship between construction costs and the value of the product.

It costs relatively little to add luxury to an apartment, but that's not even the point. The value of a dwelling doesn't come from totaling all the expenses of building it, but from what people are willing to pay. When you take the modern spoiled American young person and their parents, show them an essentially furnished studio with a kitchenette, a bathroom, a TV, and then show them a spartan studio apartment with basically nothing in it (but costs a fraction of the other apartment), they'll gladly pay more for the first one because nothing's too good for their child.

So yes, relatively little can turn an apartment into what, for university students, is luxury. Nobody I've known ever had university dorms that nice. I don't even care if Berkeley students are somehow better than other university students; they'd be throwing away money by living there. I would much rather take that money and set it on fire.