"Luxury housing" condos often get bought as an investment by someone outside the city rather than by someone within the city looking to move. They tap into demand from outside the city and fail to increase the housing supply and lower housing costs. New York has had a huge problem with foreign investment driving up housing costs [0], and according to realtors I've talked to, foreign investment is playing a large part in driving up SF prices too.
Increasing the housing stock is definitely the solution to out of control prices, but the type of housing built does need to be managed so real demand is met.
Increasing the housing stock is definitely the solution to out of control prices, but the type of housing built does need to be managed so real demand is met.
[0] http://www.nytimes.com/2013/02/12/nyregion/paying-top-dollar...