For example, I don't care about having a big garden but I don't necessarily enjoy living in a dense city. If I could WFH at least three days a week for the foreseeable future, I would gladly move to a town in the suburbs where I could have a bigger apartment for the price of my studio apartment. I bet a lot of people would do the same. This would lessen the pressure on housing in the city center, so people like you who actually prefer living in the big city for reasons other than work could afford larger apartments.
My main reason for living where I do is so that my commute is less than 30 minutes each way.
I guess the point is that as the constraint of everyone working in the same place is reduced, there will be less people wanting to live in the city allowing better conditions for those who do.