Note that even if gentrification were to raise housing demand by as much as housing supply—which is not the case—note that the general-equilibrium effects are enormously beneficial: much less pressure on non-gentrifying neighborhoods, and much larger increase in the tax base to support urban services:

Brian James Asquith, Evan Mast, and Davin Reed: Does Luxury Housing Construction Increase Nearby Rents?: "There are many plausible mechanisms by which an increased concentration of wealthy households could make a neighborhood more attractive.... We study induced demand near new apartment complexes in gentrifying areas using listing-level data on rental prices from Zillow and exact household migration data from Infutor... difference-in-differences.... In neighborhoods where new apartment complexes were completed between 2014-2016, rents in existing units near the new apartments declined relative to neighborhoods that did not see new construction until 2018. Changes in in-migration appear to drive this result. Although the total number of migrants from high-income neighborhoods to the new construction neighborhoods increases after the new units are completed, the number of high-income arrivals to previously existing units actually decreases, as the new units absorb a substantial portion of these households. On the whole, our results suggest that—on average and in the short-run—new construction lowers rents in gentrifying neighborhoods...