(Reposting this from the Green Foothills blog.)
In a housing deficient area like here in the San Francisco Bay region, it's wrong to simply say any new house anywhere is a good thing. This is true economically as well as environmentally - a potential house 10 miles due east of San Jose might sound like a quick jaunt away from Silicon Valley, but that would actually put it in a place with no roads, no services, no groundwater in reach, and no geologically-safe spot to build on. It wouldn't sell economically, as well as being bad environmentally.
Alternatively, a potential high-density housing location near a train station might appeal to environmentalists but seem too risky economically. There are different tipping points for different issues, and there's increased opportunities for cooperation where they overlap.
So here are some ideas:
Transportation: adding housing in an area that has little future prospect to use public transit is unlikely to help the transit situation. Transportation goes through a tipping point at a certain level of density that can use transit effectively. Any increase in that density makes transit even more cost effective. Proximity to good transit also creates a tipping point, where any increase in density is beneficial. Inner suburbs might be the tipping point density level.
Walkability: making a low density residential area slightly less low-density isn't going to make the area more walkable, it just puts more cars on the roads. On the other hand, adding more housing to an area that is already walkable means more people will be using the local stores, making them more financially viable. The tipping point is when an area is already walkable, or likely to become walkable. Urban townhouses and brownstones are the tipping point.
Natural open space: at first glance, there doesn't seem to be a tipping point: any increase in density decreases open space and habitat potential. Even a tiny yard might offer potential habitat that an apartment block wouldn't. However, dense housing removes pressure to construct less dense housing somewhere else. And habitat values for common wildlife decrease rapidly once roads and structures take up more land than natural habitat. Low-density suburbia probably constitutes a tipping point for natural open space.
Farming: farming may be even more sensitive to density than natural open space. Rural residential levels of density, one house per acre or even less, probably constitute a tipping point.
Financial: up to a certain point, more is better. Two homes on 50 acre lots are worth more than one on 100 acres. A tall apartment building might be more risky and appeal to a smaller market segment than a small condo building, however.
So what's the upshot of all this? From the environmental perspective, somewhere around low density suburbs, maybe two houses per acre, is the point where almost all environmental incentives are to avoid increases in density. Somewhere around the level found in inner suburbs, maybe 10 houses per acre, the environmental incentives are to support increases in density.
And from the inner suburbs up to city areas where multi-story apartments are possible, the environmental and financial interests are closely aligned.
This is all a simplification, of course. Dense housing in the wrong place is just a mistake. Natural open space in an urban area near a stream can also be very beneficial given the importance of stream environments. But it does point to areas of overlap.