I don't think cities are actually out of room. Maybe they are, but it's not obvious to me that this is the case.
> Being able to share that growth with towns that have plenty of room to expand seems like a huge win.
Not for the people who live in smaller towns because they prefer living in smaller towns.
> And preventing people with money from coming to your poor town is an excellent way to make sure the people who live there stay poor.
Not all small towns are poor. And regardless, a lot of people with money coming into a town very often causes prices for everything (especially housing) to increase, pricing poor people out of the area. And if you're poor, you probably can't afford to move elsewhere.
Not saying that these problems are inevitable, but there are certainly lots of examples of them happening. What I am saying is that this is a very complicated thing with no clear outcome for any particular place.
Different parts of US, Australia, or Europe will respond differently even when subjected to the same policy. So I don't think any one answer is correct as a general rule. But I am afraid in some places some will try to blindly replicate success stories from other places, with dire consequences.
...or more effectively, by abandoning the flawed concept of single-family zoning, thereby allowing market forces to increase housing supply where it is needed.
I've had coworkers who lived and worked in Beijing without cars - they still had 40+ minute each direction commutes. And that's a city that was extremely aggressive in expanding its transit. It's just a basic queuing/graph problem, though.
If people only make cases for transit by straw-manning the worst part of cars and ignoring the worst part of mass transit it's gonna take a long time to convince enough people to spend the billions needed to make it happen, since most people aren't stupid and they know that there are cons of public transit too, not just unalloyed pros.