I'm not saying density is a solely bad thing like traffic, I'm suggesting traffic and high prices both are part of feedback loops (traffic is bad :: high rent is bad), and this is exacerbated when in geographically constrained areas. Chicago, Dallas, Atlanta, etc, have unlimited sprawl which helps keep both the traffic and costs down, since the regions can be less centralized. LA, SF, NY do not, and none of them show a good example of "higher density -> lower prices." Instead, the most dense parts of them are the most expensive, fitting the feedback loop model I'm suggesting.

That could very well be because growth in demand has outstripped increase in supply without any sort of feedback relationship, but that itself raises interesting follow-up questions. Is rapid growth undesirable for everyone not directly benefiting from higher salaries from the growth, which is probably most people? Do developers have an incentive to keep growth in supply lagging, since it means they can get a lot more return on investment for what they do raise funds to build? Even for homeowners, your property values go up, but so does everyone else's, so you're not relatively any better off/able to upgrade. What are the political implications of that, if so?

In the past, productivity was not so concentrated in a handful of cities, making me skeptical of that linked model. Big confounding factors there in the death of industries across most of the country happening at the same time as increased global prominence and money concentrating to more and more first-and-second-tier cities.

What that sort of model also misses is that you have at least as many people preferring low density to high density as the reverse (based on empirical trends in the post-car US), and you also have a lot of people who won't be happy with a solution to job distribution that's just "pull up your roots and move to a better city, sorry." It doesn't seem to result in constructive policy recommendations that have a snowball's chance of being welcomed.

I agree entirely. But I think what you'll find underneath a lot of complaints about housing prices is the desire for neighborhoods to remain in exactly whatever state they were in on the day the person you're talking to moved in.

What is the correct density? It's the exact density that existed when I bought in. That's what people -- incumbents, I mean -- are really saying.

Driving a personal car is personally desirable (convenience) even if it is bad for society. The same thing could be said about many housing choices (e.g. single detached home).