Alex Steffen lays out the main arguments for denser cities and/or reducing car dependence very succinctly and clearly. See http://www.worldchanging.com/archives/007800.html
Unfortunately, I was unable to comment as the comments turn off after 14 days. This is what I wanted to say, but was prevented from:
There is one glaring omission I feel, one that as far as I could tell was also not addressed by the commentators. This is the power of land tax.
Land taxation is a frighteningly simple and effective method to encourage dense settlements, and quickly recoup the cost of mass transit investment. It is frightening as it threatens the FIRE economy and homeowner fantasies of extorting money from later generations when they sell.
The basic idea is to take today’s “property” tax and eliminate the portion of it that falls on the building’s value, and shift it to the part that falls on the value of the land under the building. Once this has happened, the land tax can be increased to capture a significant portion of land value increases.
The reason for its effectiveness is that it removes an enormous disincentive to intensifying land-use (as it would not affect your tax bill). Conversely, it creates a stronger disincentive to under-utilizing land, as a vacant lot next to a lot containing an apartment building is taxed similarly. Use it or lose it.
Land taxes also recapture land value increases due to transit and other public infrastructural improvements. This means that transit investments become much more affordable, as the increased tax revenue will significantly offset capital expenditures.
The final advantage gained from land taxation is the subtlest. Once the land tax recaptures a significant part of land value appreciation, property values will mostly reflect the building itself, rather than the land. This may reduce landowner/homeowner resistance to intensification, as “undesirable” land uses nearby like apartments or commercial development will not affect their property value much. In my experience, homeowners are the greatest obstacle to intensification efforts – vehemently opposing any zoning changes to allow greater density. This in turn drives up the price of any land that does get zoned for intensification, which is passed on to renters or purchasers of housing on that land.