I have a fairly wealthy city where demand for low income residential is sky-high; all else is medium. Land value is very high, however, which is why I suspect low-density mansions are being built instead of higher density buildings. The other reason I suspect this is the case is that if expand into an undeveloped area (hence lower land value, at first), a few low-density sky-scrapers will go in but subsequent large plots will be mansions. Perhaps I am just trying to build too many sky scrapers, or is there actually a gentrification issue in my city?
How to satisfy demand for low income housing in Sim City 4 in a wealthy city
simcity-4
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Cities have kind of a maximum independently-sustainable size in SC4. It sounds like you did a pretty awesome job for a single location. Once you've reached critical mass however, neighbor cities become vital. I'm sure you know that having neighbor cities with populations that need jobs will foster job demand in your main city. Having neighbor cities with jobs will foster residential needs in your main city.
If all your industry is in neighboring cities, the cause of your problem could be that one of your transit connections got accidentally severed. If residents can no longer get to their workplaces, they'll move out, lowering population and commerce. This could result in the depression you're seeing.
Therefore, the first order of business is to double-check your transit network. Did you accidentally bulldoze a city-to-city connection, or a tiny section of a major transit artery? Check recent construction zones first, then branch outward. Assuming you have the "Rush Hour" expansion, use the "Route Query" tool to make sure that commuters are actually using all the pieces of your transit network. If there are transit lines that are mysteriously under-utilized, make sure there's not a missing connecting piece somewhere in the transit line. Check all your city-to-city connections. Make sure to check the connections from both sides (both cities). Look for the arrow that indicates it's a city-to-city connection. It's surprisingly easy to accidentally cripple your transit network, and not always easy to spot the cause.
If there are no problems with your transit network, then I don't know what might have happened. To be honest, I've never made a city as big as yours, but from my experience dealing with depressions in smaller cities, the best advice I can give you to get out of this depression is always obey the demand graph.
Your city is demanding more high-tech industry. Build it - and make sure that your sims are able to commute to all your existing high-tech industry.
You say that demand is "low" for residential and commercial property. This is false. The demand is wildly negative. Negative demand means your city has more buildings of that type than its present economy can support. In time, if you can provide enough industrial jobs, these buildings may come back into use. However, if your city isn't going to survive that long, then you may need to bulldoze these unused buildings, and rezone with something your city will fully utilize (HT industry, in this case).
Your sims want high-tech industrial jobs - if you provide new HT industry, this will create new jobs. This should hopefully create a ripple effect - new industry provides new jobs, new jobs will provide new residents to fill up the empty residential space, new residents will buy things and boost local commerce. It will take time, but keep building what your city demands, and the economy should improve. Playing with taxes doesn't solve the problem at hand - your city wants more high-tech industrial jobs. Without available jobs, sims will not move back in to fill any of your unoccupied space.
You can certainly try to continue outsourcing industry to surrounding towns, but make sure you've got a good transit network if you're going to do this. If the industry is too far away from your residences, your sims may not want to make the commute all the way out there. A good transit network lowers commute times and allows your sims to travel farther away from home to get to their jobs. Trains and Subways are great for moving large numbers of people long distances.
If you don't want to optimize the transit network to let your sims commute to out-of-town industrial jobs, then you're going to have to get rid of some residential and commercial property, and replace it with industry.
Long story short, build more high-tech industry, make sure your sims are able to commute to your existing high-tech industry, and if you need to, tear down some of your empty buildings to make way for new industry. They'll never elect you sim-president if you can't prove you're a job creator!
Best Answer
One method I used to take care of this (I used to make the mistake of confusing low income with low density) was to create residential housing zones in the lesser desirable parts of town, like near the landfills, power plants, etc. The desire for this area will be low, but the lower income residents would still move there, where the higher income residents would stay in the more desirable parts of the city.
Side note, it's been a long time since I've done that, so I'm not sure if the mechanics are the same now or not. (if that's not the case any longer, I'll be glad to delete my answer.)