Luxury housing isn't luxury because it's nice, it's just luxury because it's new. Places that currently are not considered luxury were considered luxury when they were new. Someday this new luxury housing will be considered old and cheap,but only if we keep building more.

No one is going to invest money into building housing and market it as 'subpar housing' or 'eh it's okay housing'.

The cost of those units has more to do with the lack of other housing in the area rather than any relation to the quality of the housing.