I agree with you here, but have to point out that if it wasn’t for the hidden government subsidies to suburbanites the tax advantages to living in the suburbs would disappear immediately.
If the government were to remove the mortgage deduction, commuting deductions i.e. fuel deductions, properly force developers to pay upfront costs for road development/maintenance and offload those costs on new home buyers, spread out social safety net costs across MSAs instead of just city jurisdictions, etc... growth in the US would have been paramountly different, and future growth IS going to be paramountly different once a gallon of gas forever exceeds the hourly minimum wage.
IF any of the proposals being bandied about DC regarding the dissolution of FHA/Fanny/Freddie end up eliminating the 30 yr mortgage and eliminating the Federal mortgage deduction as matter of law.... everything most Freepers and Americans know about suburban life is forever going to change. And every proposal I’ve seen eliminates the backstops that allow 30yr mortgages, and most eliminate the mortgage deduction to increase Federal tax revenues...
Frankly, if you want to see what a "city scape" looks like where all those costs you identified have to be dealt with up front by the developers, or by the immediate residents what you want to do is look at Indianapolis and its suburbs. All infrastructure development there, outside of the Interstate system and the state highways is paid for through what is known as the Barrett Law.
Let's say you want a sewer system in your community. You petition for a special public charitable trust to be set up which will sell bonds to finance your local sewer system, and you will get a special tax to pay for it.
You want a new road? Same thing. How about a brand new public school? They do the same with that ~ a public school "corporation" in Indiana is, in fact, a "corporation" first, and a "school" second.
When I was a kid, which is before computers became common, my father (in Indiana) would get a property tax statement that was maybe 60 to 100 lines long ~ each line detailing a mil tax against his assessed evaluation.
The urbanized area is roughly equivalent to New York SMSA. The population, though, is a fraction of NYC and the SMSA suburbs.
The reason is that people like roads, sewers, water, gas, electricity and schools AND they don't care to live on top of the neighbors.
BTW, those public charitable trusts in Indiana are in much better financial shape than the public works department of NYC which, alas, is following an antiquated business model for creating and running a city.