The whole point of this article is that building tons of new "luxury" units actually did lower rents, moving the needle exactly as predicted.

The zoning code in the location of your anecdote must be completely suffocating, or that developer would not have left so much money on the table by failing to add more units.

Where I live, a developer recently tore down the cheap, shitty house on the corner and built not one new "luxury" townhouse, but eight of them. Across the street, a larger building was recently demolished, and now they're putting in twenty-one new units. Two cheap homes lost: but a net of twenty-seven homes gained. That represents a whole lot of competitive pressure taken off the lower end of the market.