It takes a lot of resources to provide modern amenities like clean water, sanitary sewers, electricity, gas, telecom lines, roads, etc. Economies of scale make it cheaper to provide these things if people live closer together.
It seems like there would be a tipping range where it would be a toss-up whether it was more efficient to handle these things individually or in bulk, and I wonder how cities make the decision. Like, it would be wildly impractical to run pipes to every house at one density, but equally impractical to drill wells for every occupant at another density.
I'm now curious how places decide when it's time to make the switch, and how they do it!