I think the effect of new development is complicated and characterizing it as a “trickle down” effect is an oversimplification.
I’ll tell you that in my neighborhood (Journal Square) I’ve seen many old rent-controlled apartments renovated so they could hike the rents to luxury levels. There’s a whole building on Magnolia and Summit that was completely emptied a few years ago for this purpose–I went and saw apartments there, and the asking rents were as high as in the new building at 3 Journal Square (this was before 3JSQ opened).
So the new rentals around here are directly competing against these renovated old buildings–nobody is going to pay the same price for an old apartment with half-assed renovations when they can get a brand new apartment instead. The more competition the landlords have from new construction, the less lucrative it is for them to destroy rent-controlled housing stock through renovation, which means more of it will be available at more affordable rates.
Some people think you can stop gentrification by stopping new construction, but historic neighborhoods where it’s very difficult to build new buildings are some of the most gentrified neighborhoods in the region. If you don’t build enough new housing stock, rich people will eventually renovate the old housing stock–look at Hoboken or Brooklyn Heights, where brownstones that used to be working-class boarding houses with 10 or 20 residents got turned into single-family homes for millionaires.
Anyway, I think it might be a little different with condos like 99 Hudson, because a lot of them are just investment vehicles for foreign wealthy buyers who might not buy at all in the area if these condos weren’t available.
I think the bottom line is that rents and prices will probably keep rising in JC no matter what we do, just because it’s so close to NYC, which is not building anywhere near enough new housing to keep up with job creation and population growth. But at least if you build a bit more, you can stall some of the renovations of existing old affordable buildings and keep those rents reasonable a bit longer.