You can increase density only so far. It's not like you can just make streets wider or stack them on top of each other. Not to mention all the other infrastruct

You can increase density only so far. It's not like you can just make streets wider or stack them on top of each other. Not to mention all the other infrastructure that you need. In addition to that dense housings can lead to social problems and therefore crime, which is highly undesireable. Especially in Europe you also have the problem of having a lot of old buildings that are protected, so you can't change or replace them. Housing is a very complex problem and supply and demand only gets you so far. If it were really just all about that, places like London, NY and SF would never have become so expensive.