- City has a homelessness problem. They increase services for the homeless, but because all the surrounding cities also have homelessness problems, homeless people from those cities move in until services are at or above capacity again. Although net good was done in the world (more homeless people fed / treated), from the perspective of a local voter who wants to see less tents in their parks, the program was a failure.
- City has a housing crisis. They implement a simple solution of building more housing. But because the entire country has a housing crisis, people from outside the city move in, and the housing will first go to those who can pay more, ie tech workers. As a result, the cost of housing does not notably improve for service workers, and there is even more demand for services.
- Edit: Another example - climate action. It's in everyone's best interest to reduce emissions, as climate change causes worldwide economic damage. However, if one country takes significantly more costly climate action that its neighbors, businesses will likely move production into countries with more permissive emissions laws, and our example country will take that economic hit and still suffer the consequences of those emissions, as greenhouse gases do not respect borders.
I feel like this dynamic pops up a lot in many of the problems we face today, but I don't have a good way to express it or talk about it. I've heard the term induced demand for housing specifically, but I'm reaching for something more general.