Prices do go down though. A new building in Oakland just got written down by the joint venture REIT that built it, in their filing they blame "historically high levels of new housing on the market". Rents in Oakland are down about 25% in real dollars from their peak in 2019.
Yes, but it's also Oakland - not really the most desirable place in the neighborhood. That's actually the kind of place where prices would be most likely to drop if you just increase density across the board. (Which is not a bad thing if you're overly worried about the detrimental effects of gentrification!)
People who say that are speaking from ignorance. These new buildings are ludicrously valuable. The newest, tallest in Oakland is worth > $500 million and the rents are $2k to $4k, and it's > 90% occupied. There are tons of jobs and demand for these homes.
Plenty of places with far worse reputations than Oakland are not dropping in prices, because they didn't build.
Any place will drop in prices if you keep on building in advance of demand.
Gentrification is more likely to come from lack of building than building. That's the story all throughout California and every other wealthy area in the US: extreme gentrification through lack of new housing. Its not the new housing that drives up prices, it's the lack of it.
