Demand means a lot of people want to live there. America has already sprawled out all it can.
A lot of people want to live there. That’s literally the will of the people.
Polling shows that building more housing is the will of the people: https://www.theurbanist.org/2022/02/03/poll-indicates-wa-favor-missing-middle/
American cities are far from overcrowded. NYC is half the density of Paris, a city many people find desirable and achieves most of its density through 5 story and below buildings.
And besides, it's literally the people themselves who want it- they want to live there, so we should let them.
If we don't want people to have to share housing, there is a simple solution to that. Build more housing so people can have their own apartments and houses.