Even luxury units add supply to the middle and affordable parts of the housing stock. Today's luxury units are often bought and moved into by someone moving up from a mid-market place, the buyer of which is likely moving up from a 25 year old now affordable place.

(Alternately, if no luxury unit is built, many of those buyers will be forced to buy the best-of-the-rest if they want to move in, putting more pressure on the middle, which in turn puts pressure on the affordable.)

I think many things are intentionally mislabeled as “luxury”. One can buy a simple refrigerator from Best Buy and claim that it’s stainless. I’ve seen listings brag about how the place has a Nest thermostat.

Isn’t luxury the only thing that’s even allowed to be built in most NIMBY cities? Try building large “market-rate” housing in Palo Alto and see what happens (even within the confines of their already ridiculous zoning laws).

It's luxury almost everywhere.

The only place cheaper housing is being built are in developments on the far outer suburbs of flyover cities. But even those builders are having trouble with supplies and labor.

One trick they use in my country is adding a pool to apartment buildings.

The pools are unused most of the time, but having a pool in the building increases the value estimated by property appraisals' checklists.