- Rich people will probably not lower their standards enough to live in what we plebs do, thus move somewhere else, reducing demand - Doesn't luxury living space pretty much by definition require more space? In other words, you could likely house more poor people there instead, reducing demand for housing. Even if the same rich people move in as well

Yes, those kind of policies seem to be on the more reasonable spectrum to me, though I'd prefer having incentives instead of hard requirements. Of cause prices for luxury space would go up, but this doesn't seem like much of a problem for most residents.

You seem to see new luxury apartment as only option over currently existing housing. That might be the only realistic option when owners want to maximize profits, but for society it might be better to optimize other metrics, like people living there.