Because people want to live where the jobs are, and the jobs are in the cities. It is true that there is still a-lot of land (although do we really want to covert all of the available land to housing?), but I for one would not find my line of work in the rural parts of the midwest: I need to be near big companies.

Telework is great, but it is not a solution in general. Most companies still want their staff to be able to have face-to-face meetings. E.g., in my area, Capital One has a multi-building campus. They have another large eight-building campus in Richmond. Their board would never approve “close down the buildings and have everyone telework”.

So people migrate toward the cities, and the cities get more and more dense, and more unlivable. Cities were not always as dense as they are today.