Have you not heard of mixed density? There should be houses, semi, townhomes, 3 story walk-ups and apartment buildings. You could probably do all that and still keep 50% of the island nature.
Not only this, but in the second picture, that other 96% is ripe for rezoning - money men will not stop until they buy off enough politicians to develop it into something resembling the first picture.
Edit: I'm not saying I like it, I'm just stating facts.
The shores become resort property. The rest becomes a mini-mall. The resort buys the apartment complex a year later. With any houses, all houses get bought by cooperations and rented out as overpriced Airbnb houses. Fuck we can't have anything nice with unfettered capitalism.