[TigeriusKirk]

Or the suburban residents will move to a city that pays for them to live they way they want to live.

Cities are in competition for talent and labor. Those that provide more of what the people who provide that labor want will do better than those that do not.

[jrkatz]

Right, I am suggesting that a city can play out this competition by paying higher wages, i.e. paying suburban workers directly, rather than indirectly via subsidy. The experiment here is in wondering what those same workers would do given a net zero change to their income through a larger paycheck and higher housing costs. The subsidy doesn't allow efficient price discovery.