[Johnny555]

well ... then they will have fewer people

I don't think that part is true -- they'll still have more people, but those people will be doubling (or tripling) up in single family homes or (often illegal) in-law units, causing parking, traffic, infrastructure and other problems of increasing density in neighborhoods that were not designed for it.

I see that in a neighborhood I pass through on my way to work -- cars parked on sidewalks and front yards, and long lines of traffic at the only traffic light that leads out of the neighborhood.