Self-driving cars make driving easier so they will increase the demand for private vehicle travel and make it even less likely that we can satisfy demand.

I'm not even sure it is possible to satisfy this demand in a city. Houston has 26-lane highways and they are still building more roads to handle traffic. LA uses 14% of all land for car parking and is still building more parking spots. I suppose there must be a theoretical upper bound past which building more space for cars does not eventually induce more driving, but I know of no city that has reached that limit.