Study what @maxdubler spells out here. There is no such thing as inherently “luxury” or “affordable” housing; it is abundance or shortage that makes it so.

Tiny homes can be luxurified. Mansions can be subdivided.

If 10% of the population is going to be forced to live in a cardboard box, people will fight over a basement closet like it’s a castle.

https://towns.gay/@maxdubler/109518913014356028

I’m a big fan of the card game For Sale (https://boardgamegeek.com/boardgame/172/sale). I always used to laugh at its ridiculous notion of how the housing market works.

It took me a long time to realize it’s an incisively accurate simulation. To wit:
2/

In both the buying and selling phases of the game, there are N players and N houses, and every house •is• going to get sold — no matter how little money is in play, or how much.

There’s no notion of intrinsic value at all. The price of each house depends solely on whether it is more or less desirable than the others houses in the round.
3/

How much is a mansion “worth?” Well, if there’s a mansion, a castle, and a space station, on the table, then the mansion is cheap. Heck, in the selling phase, it might sell for nothing!

Conversely, if the choices available are a treehouse, a shed, and a cardboard box, that shed’s going to sell for however much money the players can spend to avoid living in a cardboard box.

(This is the actual, literal situation in many cities right now.)
4/

The crucial difference between the game and reality is that we can have more houses than players — or fewer. That’s the magic policy lever we have to keep people out of cardboard boxes. And it’s a hell of a lever.

Should we build more treehouses, or more mansions?

That’s an important question for resource allocation, upkeep, sustainability, etc. But here’s the thing: for getting people out of cardboard boxes, ••either one is helpful•• because either one lowers the price of all housing.
/end