this post was submitted on 06 Sep 2023
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Ah yes, because that's how capitalism works. People would definitely stop developing the rest of the island because they don't need more housing.
Developers will stop building once there aren't any customers left, which absolutely does happen in countries that allow high density urban housing.
Your first statement is all well and good but your second statement is flat out wrong. That can only happen given a static population. But humans reproduce pretty rapidly. There will always be new customers until we hit a carrying capacity limit, but as technology improves the earths carrying capacity keeps going up, until of course we decimate resources and then it'll come crashing down.
If it's not housing, it's a golf course, or business district or something. The old "if you build it, they will come" plenty of people also don't spend their lives in the same place so moving to a newer, better facility is enticing to those that can afford it.
It's common for states to institute urban growth boundaries that protect forests / farms.