Enabling people's wants by subsidizing it from other people's pockets - makes for a very bad result.
Start removing tax breaks for home ownership, rationally spreading the burden of maintaining infrastructure and other fun things that are subsidized today - you'll quickly learn that most people will weigh their options and think twice about McMansions.
The reality is - many people would love to live in a small town, with a train station to take a reliable ride to work in the city. Look at what happened in England, when already subsidized train tickets from satellite towns rose in prices.