There's a problem here. The most likely first response is the cost of a place to live going up over $250/month. Those who have the power to set prices are likely to see that as just an opportunity to increase prices.
The problem with this logic is twofold.
First, you can't simply increase rent because people are making more money; people remember for years what they think the cost of things should be, and are reluctant to pay more than that, and will shop around for a better deal. So, while company A decides to raise prices, Company B decides not to do so, and gets more business because of this and still results in an increase in profits (due to a sale rate closer to capacity).
Secondly, an increase in price in one area of an industry, especially the budget options, causes a ripple effect increasing the prices of everything in an industry. While this may cause a short-term price increase, factors will return it to a lower equilibrium. If you do a 20-50% increase in rent for budget apartments (which could only happen with a cartel controlling almost all apartments in a city), it will start to increase everything else in the housing market. If budget apartments suddenly cost as much as midrange, then why would you rent budget? This leads to an increase in midrange rental, increasing prices there, so more people go expensive or buy a house/condo. This causes people to leave the rental market, so suddenly you have empty budget apartments all over the place. To rent those out again, the prices will have to start to come down.