You're just describing population growth and competing incentives, entirely normal things. They can be incentives from completely different sets of people at different times in their lives. Plenty of people are fine with density as long as the place they live is maintained and law is enforced, likewise plenty of other people grow tired of noise or have kids and move to quieter areas (areas w/ people who will then complain of urbanization).

Again none of this is something that benefits from heavily centralized control, unless you want cities to be expensive exclusive zones, and force poor people to only live in rarely built (and poorly maintained) government housing while the rest are forced out into sprawling suburbs, with just as restrictive building rules, which can only forever expand outward consuming forests and farmland + forcing more cars onto the highways.

Then everyone has to drive into the city for work, meaning a political base who doesn't care about downtown infrastructure like public transit that only serves a highly exclusive downtown.

That's a system where no one wins.