Why is it absurd, if you put numbers to it?
I make 95%th percentile income. I live in a 95th percentile house deep in the burbs. I'm in a lifestyle where a 95th percentile urban apartment is completely uninteresting to me, my numerous neighbors agree. To maximize return all condo construction downtown has been ultra luxury out of my income range, but for the sake of argument, we'll claim its affordable by a mere 95th percenter, but if I don't want to live there, it doesn't matter if there is available rental property nor does it matter if there's 5, 10, or 15 condo towers at the same price currently under construction.
There's enough of a local pyramid of incomes such that most of my fellow 95%ers are already living in the burbs and no amount of urban construction will get us downtown. So there are a lot of empty condos downtown, kind of like 2007 all over again but for a different reason.
Building something to a specific rental cost, does not obligate people to live in it, or earn enough money to pay for it.
Its like the classic micro vs macro economic effect of education argument. On a micro scale all individuals benefit from more education it always raises an individuals quality of life. On a macro scale requiring education in excess of the job reqs merely ties up labor and capital in unproductive activity, it lowers everyone's quality of life. What government policy should be, perhaps to bulldoze the schools, should naturally be the opposite of parental individual advice, to attend college. Likewise on an individual case basis constructing the most expensive possible condo is always financially most individually rewarding, yet the same act on a city wide basis the result is horrible and awful.
I could build a nice condo for a SV google employee to live in, at SV google salary. The 2000 mile commute means its useless. The point isn't the commute itself, the point is if you don't build what people want, it doesn't matter if an abstract mathematical number implies the rent should be perfect, they're just not going to rent.
There is a side issue that census figures seem to imply there's 5-10 million people in or above my household income percentile so lets call it 3 million families for the sake of argument. Lets say there's 6 million residences at or above my percentile of income. Lets say all urban condo construction to the level of 1 million residences per year is at a floor of my income (actually higher than my income, plenty of places I can't afford). If there's only 3 million families at my level of wealth across the entire country, and 6 million residences in the form of recently constructed condos and mcmansions and real homes too, there's simply gonna be a lot of empty real estate and more every year.
As long as the banks are willing to fund it, more will be constructed. The fed will manipulate things to keep it affordable to keep employment high.
I'm not necessarily offended. I my dads generation Detroit made cars engineered to rust and fall apart in two years, which was incredibly environmentally wasteful, while their houses were constructed to last centuries. My generation makes residences no one can afford to live in that take only a decade to fall apart whereas our cars are engineered to operate longer than the house are designed to stand. I'm sure there are abandoned mcmansions that are unlivable today that are younger than my wifes car which stubbornly refuses to break.