This isnt actually true.
The surface area of just the land alone on Earth is more than enough to house every human alive right now. Its actually more than enough to house every human that ever lived since the dawn of human history on it with room to spare according to expert calculations. The global population didnt even hit 1 billion people until like 1800. Now, if you subtract out all the currently unlivable areas because of nuclear radiation and harsh weather and such, you’re still going to have enough land for every human alive right now to live comfortably.
Its just that modern humans hate the idea of living so spread out, and apparently all want to be stacked into the same 10 miles of land. Also, governments charge money for land, they’re not giving that away for free.
The land’s not the problem though. Sustainable development is, and larger populations inevitably contribute to global warming, waste etc. The fact that cities only account for a small portion of land doesn’t change anything. They will continue to exist and are only manageable if the population is controlled
Two things to consider:
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Humans need to eat. The land needed for agriculture already covers significant percentage of the habitable land. About half based on our world in data [1]. Yes most of this is due to livestock so this can be significantly reduced but still.
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Other species also need space to live. Even if you look at it in s strictly selfish fashion and disregard the right of other species to exist - we are part of the ecosystem so if it dies we die.