No, it's that humans don't like crowding. More competition for everything.
One test of that would be, do they opt for more personal space if the chance arises?
What people actually want is 1) to live in a nice place where there are a bunch of amenities and 2) to have space. But since 2 is expensive in nice places, they use zoning laws and other NIMBY stuff to try and get the space at others' expense, rather than buying a sufficiently large lot, which is not cheap.