[HereBePandas]

What kinds of specific policies do you have in mind?

Seems like the reason people in the US don't build houses in the empty patches in the US is because the economics of agglomeration mean much greater efficiency/economic growth when you build them in existing large cities. How do you fight this without making the country much less economically dynamic?

[cyberax]

> What kinds of specific policies do you have in mind?

Limit the amount of office space density (cap&trade style, or with a direct tax). Promote decentralization via tax credits, etc.

These are all old ideas, but these days they can be turbo-charged by promoting WFH.

> Seems like the reason people in the US don't build houses in the empty patches in the US is because the economics of agglomeration mean much greater efficiency/economic growth when you build them in existing large cities.

Yes. It's more efficient to open an office in a large city, where you have access to a larger talent pool. And in turn, it's more advantageous to live near a dense city core, as it provides you with more options for employment.

This leads to a never-ending densification and price growth spiral. Manhattan is a good example of the end-game of this kind of death spiral.

And these are exactly the same kinds of market forces that forced companies to dump toxic waste into rivers. After all, if you take care to clean up your toxic waste, then your products will be more expensive and less competitive.

[fzeroracer]

You're looking at a side effect, deeming it the problem and trying to solve that problem rather than solving the actual issue at hand.

For example let's look at Japan. Japan does not have what you dubbed a densification and price growth spiral despite having cities far more dense than any city in the US. This should tell you that your initial problem is the wrong problem.

The answer is that they develop high-speed transportation to and from dense cores in addition to smaller sparser towns. This means property value is far lower because distance doesn't matter and in fact housing value inverts where it purely depreciates.

If we did what you propose, you would see what's happening to cities like Austin. Where offices are built in a purely sprawling fashion, highly dense traffic and shifting property value to areas along traffic corridors.