Do you eat at the cheapest restaurant every day? Do you think that every Michelin Star restaurant immediately fails and shutters? Do you think everyone buys the $80 prepaid flip phones, and no one actually buys the $700+ iPhones?

Most people don't gravitate towards the cheapest option (in fact, many people find the cheapest option automatically suspect and won't buy it), but rather want a balance of affordable and desirable. No one living in NYC is doing it because they're gravitating towards the cheapest option in the first place, they're there because it has a high level of desirability comparative to its cost, even as expensive as it is.