Woody plant encroachment degrades the economic and environmental potential of drylands by altering processes such as nutrient fluxes, ecohydrology, and ecosystem services. Though past research has investigated the encroachment process, relatively little is known about post-encroachment shrub community ecology. To better quantify dynamics within post-woody encroachment shrub communities, we combined USGS lidar height data and multispectral imagery to estimate shrub density, shrub height, shrub cover, and shrub volume across the Jornada Basin Long Term Ecological Research (JRN-LTER) site in southern New Mexico, USA. Structural estimates were analyzed in search of telltale signs of community competition, specifically, the presence of thinning relationships. Results demonstrated density-dependent thinning relationships in shrub communities of creosote and mesquite, indicating a large role for competition in arid shrub communities even at relatively low shrub densities and cover (∼35% cover). In addition, shrub volume estimates better modeled the expected thinning dynamics of shrub communities than shrub canopy cover measurements. Overall, our results indicate the utility of lidar data in extending two-dimensional descriptions of woody vegetation structure (i.e., woody canopy cover) into the critical third dimension (i.e., woody plant volume), as well as the relative importance of competition and demographic bottlenecks to vegetation structure in drylands.