Please don't come at this with simple models since the real-world interactions are very complex. What you describe only works that way in non-competitive markets or where there are artificial constraints on supply. Food and product prices are pretty much all determined by marginal costs in competitive markets since if you try to increase your prices "because my customers have more money now", your competitors will undercut you and you'll go out of business. This is why things have been getting cheaper over time as a portion of income, even while incomes have risen [1].
Housing is its own story because anti-development policies have constrained supply, which artificially forces prices up. However, 1) it's important not to conflate it with cost trends of other basic needs, and 2) there's a strong argument that increasing base-level income also increases mobility to lower-cost areas, which has a stabilizing effect on housing. The few reputable studies on UBI-equivalents I've seen show pretty minimal price inflation in comparison to the income gains, for example [2].
It's called supply and demand, nothing magical about it. The only thing magical is leftists thinking this won't happen.