[GeneralMayhem]

You might think this is a gotcha, but in reality this is a question with a very easy answer: we should subsidize things with positive externalities, and not things with negative externalities. Suburbs have negative externalities (pollution, infrastructure cost, social isolation). Caring for the poor and sick, educating the young, and putting out fires all have positive externalities.

[covidthrow]

I don't think this is a "gotcha". I asked for a threshold, accepting that there are varying costs and benefits.

I think that your justification is lacking, however. As though there are no positive externalities for suburban living (there are), or even negative externalities for the other items (there are).

I'm not sure I trust your assessment when you identify only negative externalities to suburban living, frankly.