Property values don't usually go down when you increase density. Look at NYC or Tokyo or Paris. If anything it usually makes the land value go up, especially if a developer knows they can buy it and put four units in it's place.
Do you have a source on that? Tokyo is famously known for having largely flat housing prices over the last 20 years[1]. In fact, in Japan, most houses are considered depreciating assets [2].
[1] https://marginalrevolution.com/marginalrevolution/2016/08/la...
[2] http://freakonomics.com/podcast/why-are-japanese-homes-dispo...
It could also be that property values never went up to begin with in Tokyo, and remained at market equilibriumm, I.e. prices there reflect simply the cost to produce the unit, plus some profit margin. Things never got out of hand in Tokyo like they have in SF and NYC (though the latter, to a much lesser extent).
The value of most commodities stays flat once it reaches that equilibrium (eg. most food, clothing).
The argument that housing prices in SF would fall with increased density seems to be another way of making the claim that SF housing is currently experiencing “surge pricing”, so to speak.
It is difficult, if not impossible, to on the one hand supply large amounts of affordable housing and on the other to not negatively affect those benefiting from the lack of it.
But ultimately it isn't me you have to convince, but those who would risk their property values. If you do that, then you have a solution to the situation.