Do you think induced demand might be a problem? It's been shown that by increasing the size of highways, for example, you increase traffic:
The thing with induced demand is, everyone admits that it's possible to out build induced demand - it's just impractical to do so, so it rarely happens. The housing equivalent of induced demand (people who live in suburbs moving to the city) is a very real phenomenon, but it's inherently self-regulating. If people avoid living in the city because of cost, they'll stop moving in when the price stops coming down.
Luckily for housing, while the main reason we don't have infinite transportation infrastructure is cost, the main reason we don't have infinite housing is regulation which is inexpensive (in theory) to remove.
More housing may not result in an equivalent drop in price. But it will increase the number of people with access to economic opportunity.
Suffice to say I’m in favor of increasing throughout. For both transportation and housing.
It applies to everything, from housing to hamburgers.
I have a hamburger restaurant where I sell hamburgers for $5. Some people buy hamburgers, and some people will not buy hamburgers. Some of the people who will not buy hamburgers would buy a hamburger if the price was lower. If I drop the price, I will induce demand.
Induced demand in the context of market-rate housing is highly speculative and if it exists at all likely to be very limited. It's sort of non-sensical, like saying that demand for the original iPhone (or any new product) is "induced demand", either because it was new or because people wanted to be like other people. That's not the kind of phenomenon the concept of induced demand is trying to describe.
Likewise for housing, induced demand isn't that bad. Most people will only ever have one house. In the case of a highway expansion, people can easily take multiple auto trips that they'd otherwise avoid given congestion. Unless the price of housing craters, I doubt most people will start consuming multiple homes.
Like yeah, maybe. But if a place is so awesome, then shouldn't we try to let more people live there? Shouldn't we trying to continue to do things that make this city awesome?