[kiba]

Presuming everyone does want to live in a dense area (I do not), building housing and infrastructure is expensive and at the end of the day it has to be profitable to build. We don't really have the framework to zone municipalities at the Federal level. So now you are talking about leaving it to the individual states... and I think you can see where that goes.

It's impossible to build if there are restriction on permitting and construction. Also, I would expect land cost to be a significant factor in high density area due to high demand.