Real estate development tends to be done on loan. Before the decision to buildi a house is made, it is pitched to the lenders. The lenders also lended mortgages for other houses in the area and own a few, they want values to go up. The lenders approve the more expensive developments expected to increase real estate prices, not the lower income housing. The lenders can always choose a different developer to give the money to, the one that will pitch the higher perceived value development.