It's less rosy than this because those 6 story apartments are built on credit where the valuation of the building is based off the market rents. If rent goes down the bank comes-a-calling telling you that your LTV dropped and you have to put up more collateral. The building owners just straight up can't afford to do this so they're stuck between keeping rents high and accepting vacancies which limits their revenue and foreclosure.

The spice must flow, property valuations must go up or the whole thing collapses. It's why non-SF-esque cities only allow expansion in-line with population growth or a little less because they will immediately be tarred and feathered if they make everyone's mortgage underwater.

To be clear this isn't a good thing, but no one wants to blink first and start another 2008.