> The roads in these older neighborhoods are ill prepared for increased density
Infrastructure is a problem. Many American cities seem to be stuck on 50-year-old (or more) infrastructure and unwilling to fund anything new. But blocking development isn't the right answer, investing in better infrastructure is. Build a damned light rail network, like Minneapolis (my home town) is doing. Rail commutes are nice, you can read or play video games. Then it doesn't matter if you can afford to live in the city center.
> If one out of every four "tall skinny" houses was made available at well under market rate to local, low income renters
This is a popular idea but I think it's naive. How are you supposed to decide which low-income renters get lucky and get to live in a much nicer house than their peers? And who pays for it? If you're going to tell developers to foot the bill then that discourages development which ultimately makes the housing shortage worse.
There are a surprising number of homeless people who live off of their disability benefits. If they could find such an arrangement as described above, they wouldn’t be homeless anymore. But landlords have no incentive to take that risk with them, and they won’t pass any of the income screening processes that are baked in to the apartment rental process today. As the worst of our housing stock disappears, the fraction of the overall housing market that remains accessible to people like that becomes ever smaller.
Worse, it’s a ratcheting effect: it only works in one direction. Sure, as the new high end units go up, the previously acceptable ones look less desirable, but it takes a long time for a unit to reach the bottom rung. Plus, even if it’s now the least desirable building in town, if it belongs to a landlord unaccustomed that to renting to the poorest segment of society that can technically afford housing, it’s likely that landlord will not want to change their requirements and policies to begin renting to them. The landlord is likely to preferred to sell the property instead, which greatly increases the chances it will be redeveloped into luxury housing, and so on.
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.