If the people cut down a forest and on its place build housing development, then there will be multiple consequences that will affect the natural cycles, including the water cycle. With the trees being gone, the water vapor that they release through the pores of their leaves will no longer be present in the area. That will lead to less humidity in the air, as well as decline in the formation of clouds in that area. Also, because the root systems of the trees will no longer be present, the majority of the water will not be absorbed into the soil. That will lead to decrease in the groundwater levels, but will also significantly increase the amount of runoff, as that rain water will flow freely on the surface.