There’s no market. People who need $500 apartments get subsidies. In my city, the rent for a fancy suburban apartment is within 15% of a ghetto hole with people selling heroin out front. Now there’s a new market for dual-income, no kids and retirees who want very fancy stuff in the city.

That “$1000” apartment is a sweet spot for builders. The cost of building out a smaller, high density apartment is higher due to more trade work (plumbing, electrical, etc) and more risk abatement for building codes and ADA compliance.