I find this to be a bit of a straw man. We're not talking about the worst case scenario here. We're talking about a lot of simple changing of density so more people can live in an area. I own a single family home right across the street from apartments. My property values are fine. And a lot of the NIMBY stuff isn't "I don't want my property values going down." It's "I don't want to live next to...you know...those people." If people don't want to live next door to a homeless shelter, that's one thing. If they don't want to live next to a 5-over-1, that's quite another. That's just life. The world doesn't stop just because people want to live somewhere for 30 years and don't want the neighborhood to change.

In a more holistic sense, we need to move away from the concept that your house should appreciate in value. Change the word "house" to "car" and people would think you're crazy. Of course cars go down in value, why not housing? My understanding is that in Japan, homes do not appreciate. The concept that increases in home equity drive a lot of people's wealth is what drives all of this.