Yes 'can't'. (Typing and watching a movie and studying at the same time mixes me up. Ha.Ha.)

'somebody's got to provide housing at a price the residents of older housing can afford, or you're going to have more than economic collapse'

Very true.

If the market functions correctly, the working classes will be able to move into the cheaper end of the new apartments - perhaps ones with a lack of sunlight or a lower standard of furnishing. Rents need to come down to a level where they can be afforded by the masses, which is probably what the government are hoping the current oversupply of apartments will do. The demolition of old apartments must be done on a gradual basis - too many people looking for somewhere to live at the same time will drive the prices back up.

'If the market functions correctly' - not sure what you mean by 'correctly'.

A correctly functioning market is one where everyone involved gets what they want (though of course for that to happen no single group can take all the spoils). In this case, the working classes want a reasonably comfortable place to live at a price they can afford to rent or even buy, and the landlords/xiao qu owners want enough money to cover their investments and give them a profit.

Not sure that's what everyone wants or that any such market can ever become stable, but I understand what you mean now.