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You'll get no argument from me that walking is a better experience than anything else. The important question here is why isn't there cheap housing near where people work? NIMBYs? Well yes a bit, but a big part of the reason as well is that it's easier and cheaper for developers to build cheap low density housing on the edges. This is because road users don't pay the true cost of their transportation and so living far away appears cheap to them. If more of the real costs of transportation were surfaced, then housing at the margins would not be as appealing, and there would be a greater incentive to develop denser urban housing.

This sprawl inducement is also what makes it harder to build good efficient public transit. Investment in car oriented infrastructure degrades transit effectiveness and intrenches a city and its residents in a car oriented mode.

The result we need is for the cost of urban housing to be less than the cost of suburban housing + the cost of driving.

You're proposing to add to the cost of driving until that side of the equation exceeds the cost of urban housing. But if you don't address density restrictions or minimum parking requirements or urban property taxes, that is not going to end well.

Today it costs $3000/month for an apartment in the city vs. $1500/month for the same apartment in the suburbs and $400/month worth of driving cost. If you add $1100/month worth of driving fees to even it out but still have all the restrictions on creating new urban housing, next month the same apartment in the city will be $4000/month and 95% of the same people will still live in the suburbs. And employers will start to move out of the city because they can't afford to pay employees what it costs to work there anymore.

Whereas if you eliminate the impediments to creating new urban housing (or subsidize it if necessary), the price of the apartment in the city falls to $1700/month and we have the result we need without having a regressive tax on driving.

The important thing here is to recognize the political reasons for why restrictions on density and creating new urban housing exist. So long as urban sprawl is an easy possibility and the status quo solution for expensive housing is to implore young people to simply move further away, there will be little to no political pressure or incentive for politicians to upzone urban areas.

Essentially new development in greenfield or brownfield areas shields established urban residential areas from needing to be redeveloped.

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