In the cases where someone can make it through the years long process to get a building approved, the only thing that makes financial sense to build is luxury apartments.
If you want more inexpensive apartments the key is to build more of them.
Exactly! That's the problem with housing as a market commodity -- developers will only build luxury housing or slums. A deregulated housing market looks like this: https://en.wiktionary.org/wiki/slum#/media/File:Mumbai_03-20...
Affordable housing requires public investment, public housing. There is no other solution.
Trust me, if developers could freely serve every sector of the market there was demand, without being choked by zoning, land supply, etc, we would see the whole housing range from the Toyotas to the Testarossas.
You can't do that with housing. No amount of new zoning or new construction can solve that problem, because the land in every city is already fully monopolized.
Housing will never ever be a "competitive" "free" market. It can't be, because buyers don't have meaningful agency in their choices (for all but a few exceptions, everyone basically has to live pretty near their work/school/family), and buyers can't opt-out of the housing market (there are no reasonable alternatives except things like homelessness, which aren't reasonable).