&gt; If more restaurants open, more people will go out to eat.<p>That&#x27;s not a change in demand, that&#x27;s a change in market clearing quantity.<p>Conversely, increasing residential capacity increases people which increases demand for services for the people which creates jobs which creates demand for residential capacity.<p>&gt; If more people go out to eat, restaurants will make more money.<p>In total, sure. Individually? No reason to expect that.<p>&gt; You can&#x27;t argue that allowing single-family structures to be replaced by e.g. townhomes in a reasonable fashion is somehow beyond us as a society.<p>Maybe one could could argue that (or argue that doing so &quot;in a reasonable fashion&quot; is self-contradictory), and maybe one couldn&#x27;t. But its irrelevant, because that&#x27;s not what any in this thread <i>did</i> argue.<p>What has been argued is that the naïve analysis of its effects on affordability considering it only as a supply change in housing without considering the less-direct effects that has on residential demand, demand for (and price of) essential infrastructure and services which factor in to cost of living, etc., is foolishly overoptimistic.