While I agree this is a major component, I think it's an oversimplification. As construction increases in an area construction labor costs increase. Water prices might increase, as more residents draw from a finite supply. More schools, DMVs, grocery stores and strip malls need to built and new construction is more expensive. Liquor licenses might be a static amount and grow more slowly than the population.
I would describe COL increases as local resources and infrastructure being put under more demand and investments into importing resources or building infrastructure is more expensive than using existing infrastructure. Property taxes are a large source of funding for these investments. Dense housing might reduce the additional load on infrastructure but it doesn't remove it.
I would describe COL increases as local resources and infrastructure being put under more demand and investments into importing resources or building infrastructure is more expensive than using existing infrastructure. Property taxes are a large source of funding for these investments. Dense housing might reduce the additional load on infrastructure but it doesn't remove it.