Because I didn't see it in any of the other comments: '
The realistic path is that apartments become $500 apartments late in life cycle. It's extremely rare to build low-end housing, but not so unreasonable for units to filter down-market over time when new construction provides adequate supply at the upper end of the market. The logic of updating vs. repairing changes when new housing is a regular occurrence.
Interestingly - if you allow growth to keep up with demand, there are units today that are being held off market (as investments) that suddenly aren't good investments anymore, so they go back on market.
The realistic path is that apartments become $500 apartments late in life cycle. It's extremely rare to build low-end housing, but not so unreasonable for units to filter down-market over time when new construction provides adequate supply at the upper end of the market. The logic of updating vs. repairing changes when new housing is a regular occurrence.