If one believes density is a good thing that makes for better living, then adding more units should make it a more desirable place to live, driving more demand,

If one believes density is a good thing that makes for better living, then adding more units should make it a more desirable place to live, driving more demand, and increasing prices. SOMA might be an interesting example of this, where it used to be cheap and undesirable, but after a critical mass of housing was built, it became much more livable and expensive. Of course, there are hundreds of things having simultaneous impacts, so it is impossible to isolate the effects of one.