> It would make economic sense to build more sanely priced apartments and make a quick buck instead of tearing down the building to build more luxury. It's actually better for their short term profit for once.

Based on what exactly? If anything, the flip will incentivize them more to make those apartments luxury, because the people in the area are rich anyway and they’ll probably already put a lot of money into plumbing the building and making sure it has apartment code safety measures.