Different people have different needs. Some people would be happy in cheap housing and others wouldn't - maybe they're more sensitive to sounds, environmental conditions or whatever else is the difference is between cheap housing and more expensive housing.

The point is, there's no basic standard that would satisfy everyone (unless that's a reasonably high standard, which isn't what is proposed here). Some people would consider more expensive goods and services NEEDS rather than luxuries, and for good reason - consuming cheaper alternatives might not kill them, but it would make them depressed, less healthy and less productive (for example)

So it is unfair to subsidize certain goods and services and not others - one might wonder "why is my neighbor getting her needs met for cheap, while I have to pay full price to meet my needs?"