Let's say a capacity for significantly greater population density 
were somehow created in the downtown area.

  Why does anyone assume a static population model for the area, or 
that more housing downtown would produce migration from outside-town 
to town? Isn't it just as likely that there wouldn't be a significant 
movement, except for an increase of population in town, as the 
increased housing capacity gradually came on line? Attractive 
situation for refugees from increasingly expensive nyc, or people 
from increasingly unstable coastal areas, etc.
  And what would prevent further sprawl crawl?

Happy that tomcat gets me & my bike up above the Aurora St. hill,

--Ira
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