No one is claiming that if you increase density the price will always go below the price before you added incremental units. People correctly point out with data the as you add marginal units the rate of price increase goes down. So the future price will be lower than it would be absent those marginal units. It's super basic economics.
I just made a post saying the same thing so I feel the need to play devil's advocate - Induced demand also exists. Seattle got hit by this last decade when the Bay Area had no more construction but we still had some, people flooded here for affordable houses. Denver also got a lot of this, and so did Austin more recently.
Math has to take into account that if 30k people want to move to a city, and you build 40k houses ( to drop prices), well now maybe 50k people want to move to the city and prices will still go up!
Austin is a bad example, since prices actually went down about 17% in the last 3 years.
If you create the regulatory climate that allows the market to provide housing, you can probably absorb a few tens of thousands of people over a few years. Most of these places don’t do that at all, other than Austin.
