Interesting article by Richard Florida in the Atlantic Monthly. He believes that increasing urban density is good for many reasons. I agree.
In the City of Peoria, our population density has continued to drop. This partly because of the loss of housing in the older part of the city, partly because of lower household size, and partly because of new lower density housing in the northern part of the city.
Part of the process of rebuilding our older areas such as the Warehouse District is to attract new housing and residents to our older neighborhoods. More people will result in a livelier town with more attractions.
http://www.theatlantic.com/business/archive/2010/09/the-power-of-density/62569/