The sewer problems disappear with lot size because of septic fields.
The water is robbed from what agricultural land remains -- not much, because of the houses. The rivers and streams dry up as they go into people's houses and on their lawns (and how's that for a waste of resources?), or if the water is pumped out of limestone caverns, as it is where I live, helloooo sinkholes!
Ultimately, it's up to the people in the cities to say they'll support more people. If they say no, then urban sprawl, which is already here, will continue.
Or we can encourage larger government, to inflict a non-voluntary building program on the people in the cities. Take your pick.