This piece from The Freeman looks at the debate over sprawl and whether free market economics encourage it or offer a solution.
"The exchanges focus mainly on zoning rather than other interventions that have been identified over the years as factors that abet sprawl. These include federal subsidies to construct the 46,876-mile-long interstate highway system and intra-urban freeway systems, both of which have made living in the less-expensive fringes of cities cheaper for urban commuters - not to mention federal subsidies for the construction of water mains, sewers, telecommunication lines, and, as we all should be well aware of today, direct and indirect subsidies to single-family home ownership via Fannie Mae, Freddie Mac, and a slew of federal policies intended to promote single-family home ownership, dating back to the Great Depression, including the income-tax deduction for mortgage interest."
The article suggests briefly that the demand curve for sprawl goes down over time, though that assertion is not fully explained.
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