It depends on the jurisdiction. I know of one city where the local government would not extend utilities beyond city limits. So if you had two fields right next to each other that were physically suitable for development, the one inside city limits would be far more valuable to a developer.
In appraisal and real estate this is part of the concept called Highest and Best Use. Basically, it boils down to what is the most profitable use of a piece of land and/or improvements based on the tests of physically possible, legally permissible, financially feasible, and maximally productive.
You wouldn't build a single-story building in Manhattan; you would build a skyscraper as that is maximally productive. If you had a field that was outside city limits that can't get zoning approval (legally permissible) the highest and best use might be agriculture or a handful of homes on well and septic. Change the legally permissible to allow a residential subdivision and now the value of the property is multiplied.
The problem I see with "highest and best use" is the hypothetical family farm in an area that has seen a lot of growth, and is now surrounded by residential development. I've heard stories about folks who were forced to sell their land, thanks to skyrocketing taxes because some local bureaucrat had decided that the land would be far more valuable as residential or commercial land, regardless of actual market demand for such properties. I suppose that you could handle that by tying "highest and best use" to actual zoning for that land, but then you're back to a situation where a developer could be simply holding on to ag-zoned land until the market is ready for them to build.
The problem with this solution, as well as so many of the other proposals in this thread, is that they represent an effort to thwart the laws of supply and demand, and to impose one person's set of values (for example, environmental concerns, walkability, community feel) on another person who may have different values (cost of housing, space to spread out, not sharing walls with neighbors). If we want to attract people from the suburbs back into higher-density areas, we have to first identify why they prefer the suburbs, and figure out how to either meet those same needs (real or imagined)*, or convince them that the benefits of urban living outweigh the costs.
I think a lot of premises need to be challenged as well. Covid-19 has brought into question the cost/benefit of centralized offices. I definitely recognize the benefits of having coworkers nearby. But let's take a step back: why does that office need to be downtown, if many of the employees would prefer to live in the suburbs?** Or even further: why do we need to have, for example, all the big tech companies headquartered in already-constrained west coast cities?*** Why are we (collectively, as a society/economy) trying to squeeze more and more people into the Bay Area?
* - Why do I live in a SFH in a sprawling suburb? There are lots of reasons. Because I can get a whole lot more house for the money. Because I can (relatively) easily modify my house to meet my family's changing needs. Because I have six kids, some of whom are very loud, and the idea of sharing walls or floors or ceilings with neighbors is laughable. Because we homeschool, and DW hosts a weekly co-op with 60 people at our house. Because I can grab a ball and go play soccer in the front yard with my kids. Because it's a quiet neighborhood, away from lots of traffic noise. Because, while it is considered impolitic to say so, the fact that we're in a middle-class area means there's less crime to worry about. Because I can plant and grow my own fruit trees. Because having a decent-sized garage means I can maintain and repair our cars myself. Because I can go out on my deck and enjoy the view of a muskrat paddling around the shore of the retention pond, hear the frogs croaking at night, and watch spectacular sunrises and sunsets in my bathrobe. Because I don't need to commute to a high-density area for work. And, among other things, the politics of my suburb agree with me far more than what I would deal with in a big city. If you want me to give all of that up, you better have a freaking HUGE carrot to offer.
** - About a decade ago, my former employer built a huge, brand-new campus 30 miles away from its former headquarters in downtown Houston. Practically all of the employees lived in the suburbs anyway, so the move resulted in a lot fewer miles driven, plus took pressure off the highways into downtown.
*** - I have a relative who works for a MAANG, and recently got permanent approval for remote work. He, with his family, moved halfway across the country in 2020, and bought a house in a quiet suburb. He's taking a pay cut in the process, but is still ahead financially compared to before, and they absolutely love their location. And his employer saves on his office space and his salary. It's a win-win!
^ Some great questions here
@zolotiyeruki .
The funny thing I've realized is that while 99% of people think the particular things they consider valuable are OBJECTIVELY valuable and OBVIOUSLY NECESSARY to have a good life, there are others who think a completely different set of things are objectively valuable and necessary. The urban/suburban/rural divide is only one such obvious example where members of each cultural camp feel lucky to have the beneficial things in their particular lifestyle, which tends to be a lot like the lifestyle/culture they grew up in, and they feel sorry for people who make the foolish decisions not to have such things.
One could make a list of "things valued" by these cultural divisions:
Rural:
*agricultural / hunting self-sufficiency, hypothetically anyway
*ability to be by oneself, and not have to constantly compromise with so many people around
*the beauty of nature
*not having to worry about crime
*having particular things that only fit in a rural environment, like ATVs, big trucks, and agricultural equipment
Suburban:
*having a big house with lots of stuff packed into the formerly 2-car garage
*having a lawn and dabbling in gardening
*having a nice car to commute in
*"good schools" based on being co-located with similar taxpayers who can afford the cost of commuting
*owning pets
Urban:
*being on the frontlines of economic growth and cultural change
*theatre, music, art, culinary adventures, and festivals all over the place
*education and achievement
*being able to easily hop on international flights and travel the world
*for some, pride in being part of a city as an organizational and identity-giving unit
Obviously, there are people who are happy or at least think they should be happy in each environment, so there is no universal or objective set of valued things. Where then, does our concept of value come from? I suggest we're just picking up cultural norms from the people around us. Had our families, friends, and local advertising persuaded us to value a different set of things, we would have probably gone along with it. We get our values from others.
Lifestyles are collections of products just like the things on store shelves. Regardless of which exact products are being produced and consumed, economic activity and environmental destruction occurs. To people in each of these cultures that feels like progress. The things people are sooooo adamant about - cheap gasoline, zoning restrictions, rent controls - are merely the things they think they need to resolve dissatisfactions with the cultural configuration they've bought into, or been brought into by circumstances. Very rare is the rural farmer who questions why they should continue their work when they could earn more at an urban job, or the suburbanite who questions why mowing a lawn is worthwhile but attending a community theatre is not. Similarly, people living in urban environments rarely find themselves craving a farm tractor or a horse, or a garage full of holiday decorations, except perhaps as a fantasy. Nobody who is dissatisfied stops for a minute to question whether they should completely reject the set of values they obtained from the people around them and the media. They're more likely to spin their wheels for a lifetime struggling with the various costs and vulnerabilities they endure in each of their respective cultures.