Higher density would mean the costs would come down. The $350k house doesn't cost that much because it's 15 miles from downtown, but because it's the 225,000th

Higher density would mean the costs would come down. The $350k house doesn't cost that much because it's 15 miles from downtown, but because it's the 225,000th (made up number) closest house to downtown. Imagine you could miraculously cut 5 yards from the length of every city block. Your house would suddenly be a mile closer to downtown. But – assuming no reaction from the outside world – the competition for housing and the relative competitiveness of your house wouldn't change.