That doesn't take account of what quality and price-point the old and new units occupied. If the old units were older housing with fewer amenities at a lower price-point and the new units were luxury condos with in-building gymnasiums and doormen, then she was right and you were wrong. In that case, the construction was shifting the supply-versus-quality curve to more supply at higher quality and less supply at lower quality. Lower quality isn't always a bad thing, because it naturally implies a lower price for those comfortable with the no-frills approach.