When you say "force demand to spread out more", what policies do you propose, and how confident are you that this is both easier to accomplish than the YIMBY solution and leads to better outcomes?
My default (weak) assumption is that a policy requiring more explicit force is more likely to produce unintended negative consequences as well as greater harm if unpopular. So a ban on A has a higher bar to clear for me to be on board than a subsidy of B over A. My initial reaction to the sentence "force demand to spread out more" is both worry at how heavy-handed that sounds at first blush, as well as confusion as to what the upside of this is over the YIMBY solution, besides preserving the utility of some currently-exurban houses/land that would otherwise go unused. That's good, but I don't see why it's so good that it justifies not pursuing greater density instead, since as you say the money is already in the city.
I don't want to get into reasons for desirability of suburban vs high-density areas, which is a topic of its own, but clearly a lot of people prefer to live in lower-density areas than NYC.
Here are some actions I support based on the above model:
More antitrust action. I think America has oligopolies that are bad for consumers anyway, and corporate consolidation means more centralization of corporate leadership in a few top cities - and then every layer of managers wants to live close to the layer above them. I support breaking up many big companies.
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Scott Alexander posted this last month, arguing that building more in an area doesn't necessarily decrease local prices because it can cause more people to move in.
I see 3 levels of argument here, based on 1st, 2nd, and 3rd-order effects:
Position (3) has long been my view, and I thought I'd write a post explaining it a bit.
The problem in America isn't a lack of aggregate housing, it's houses not being where people want to live. Building more in those areas might seem like an obvious solution, but it wrongly assumes "where people want to live" is constant. If we instead consider that it could change, we need to consider what makes people move from an area with cheap housing to an area where it's expensive.
You can just ask people that, and they'll tell you: jobs. OK, so why are there better jobs in the expensive areas?
If you ask an economist, they'll probably say something about improved economic efficiency from people being closer together. I don't buy it, because it contradicts what I observe directly:
Yes, people in NYC and Silicon Valley get paid more on average, but I reject the assertion that wages reflect productivity or competence. If wages were high simply because aggregation improved efficiency, then we'd see a stronger correlation between density and wages, but the correlation of wages with housing prices and with wealth is stronger. In my experience and the experience of people I know, the dominant factor is how close you are to money. Wages in NYC are high because there are wealthy investors and corporate executives there.
Why, then, are those rich people in NYC? Because:
In this model, building more housing in Silicon Valley or NYC just leads to more competition for about the same total income from "good jobs", with that number determined by the amount of money there. That makes things better for rich people buying luxury services in expensive cities, and worse for other people. If you make housing cheap enough for many poor people to move in, the rich people might even leave because of that, decreasing the number of good jobs.
The solution, then, is not to build more in high-demand areas - it's to force demand to be spread out more.