> nobody will move. People don't move just because housing is cheap.
Judging by what I see happening in Texas where the mentality definitely is build, build, build...people definitely do choose to live in the way flung out there suburbs and actively look to move there. Just around DFW places like Prosper, Forney, Weatherford, Burelson, and far more continue to attract tons of people wanting to buy a house even if its way flung out there. People drive from as far out as Kyle and Serenada and consider themselves part of Austin. Houston is about done with its third highway loop, TX SH 99. Tons of people don't blink an eye about having an hour long commute it seems.
I'd argue this isn't a great way to build our cities without also laying the groundwork for decent transit but you can't say people aren't choosing it. I kind of like the multi-polar MSA setup in some ways that we have here in DFW, although it could be a lot better. If you're wanting a more urban lifestyle, you don't have to be directly in Dallas.
https://en.wikipedia.org/wiki/Texas_State_Highway_99
> Ground space is limited
For a lot of the US this just isn't true. It is true for several notable big cities in the US though, I will agree. Can't really add more land to San Francisco or Manhattan cheaply.