This is well studied, and I don't believe that's true: a luxury development _reduces_ rents in the immediate surrounding area.
Many studies find a small net drop in rent (1-5%). But other studies show no aggregate drop in rent. And importantly show an increase in rent for lower quality apartments.
Also for single family homes, nearby property values generally rise.
https://www.tandfonline.com/doi/full/10.1080/07352166.2026.2...