Hiding massive market failures behind "market rate" is a form of economic pollution. The rise in property values is an economic burden (debt) that any future resident will have to shoulder, not unlike living over a toxic dump.

The solution to this is usually stronger enforcement of regulations, or stronger regulations, to prevent this. Inclusionary zoning, for example, is one way to allow failed markets to continue serving the needs of the chosen few, while acknowledging the economic pollution generated by that development and attempting to clean up after it.

Inclusionary zoning is probably best thought of as a housing version of a carbon tax. "We'll still let you pollute, but you need to pay some taxes to cover some of the damage your pollution caused and the cost of cleaning that up".