If a municipality is looking at two competing development plans for a couple acres of town:
1. 10 new $500k - 3,000sq ft McMansions = 5 million dollar base and 48 people (estimating 4 people / family)
2. 30 much smaller houses at $100k each = 3 million dollar base and 100ish new people (estimating fewer / house)
In the small house scenario (if they were built on foundations and tied into city water/sewer) you also end up with 3x as many connections to install and support, significantly more kids that need educated at the local overcrowded school system, etc.