Because a 5 million dollar luxury apartment built for foreign investors and an affordable 2 bed for a nurse arent competing in the same market any more than a bike and a ferrari are.
It wouldnt be such a problem if the free market could create land, could create public transportation to link up housing to cheap land or could be kept from creating "apartment bitcoins" with a 100% land value tax but it refuses to and it wont.
So, while the margins on luxury housing are ~15% and affordable is 4-6% the free market will rationally maximize the utility of property construction firms...
It wouldnt be such a problem if the free market could create land, could create public transportation to link up housing to cheap land or could be kept from creating "apartment bitcoins" with a 100% land value tax but it refuses to and it wont.
So, while the margins on luxury housing are ~15% and affordable is 4-6% the free market will rationally maximize the utility of property construction firms...