I also wonder...does the higher density in Waterloo include the university student buildings? If so, then yeah they'd have more people packed into a square kilometer than the rest of the region but because that population is highly transit in that they come and go, it kind of throws the numbers off compared to permanent residents (who, say, live there for 5+ years). And indeed, the size of the cities greatly differ. Kitchener is 136.81 km2 versus Waterloo at 64.02 km2, so naturally, you'd have more density as a whole even when you take into account that Waterloo barely has 100'000 residents versus Kitchener which has around 250'000 (going by 2016 census numbers, of course - the true population is much, much higher in 2022). Kitchener simply has a lot more space to work with, thus more single family units built.
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