It’s not the Middle Ages anymore. People live off of communities and centers of economic activity, not the land. There being enough land to go around is irrelevant.

Successful economic centers grow; failed ones shrink. Yes, there is cheap housing around economically crumbling places, but bricks and dirt don’t sustain life. Economies do.

You could try to counteract economic centralization by restricting commercial development as aggressively as residential in growing places, but (as with housing) you’ll see all but the highest value businesses displaced. I don’t see how you could pull off decentralization without full-on central planning. Capitalism wants megacities, badly. To decentralize the economy, you need extreme policy interventions for every aspect of life and commerce. It might work, but what’s certainly not working is making the intervention only for housing.