Something to note is that Seattle's central neighborhoods were strongly in the grip of a condominium boom. Older houses and 12-unit apartments were being torn down to build fancy 200-unit condo buildings for more than double the previous rent.
Everyone has to live somewhere; fitting 200 people on a small but tall, fancy condo plot frees up 200 people-units elsewhere. That's how supply and demand work.
Except that somewhere isn't implicitly in the vicinity of the new development. That somewhere could be in the suburbs, another city, a dorm room, a room in a parent's house, or any other options which doesn't have any real impact in the availability of housing in an area.
