the issue is suburbia requires too much infrastructure per person. The roads are no cheaper per foot nor are the sewer lines or water pipes but the lower population density that still uses shared resources (city supplied -- unlike rural) makes the budget go negative.
I've heard this before. It wasn't true then, and it ain't true now.
For an objective look, compare taxes to services urban, suburban, and rural. Cities consistently have higher taxes, and provide the same services as suburbs, they just don't provide the same quality. There are streets of Seattle patched so heavily, and so uneven, touching your brakes triggers antilock braking and traction control to kick in. In the suburb of Marysville, my residential street was repaved before the first pot hole.
Now, I work in telecom engineering, I worked on the fiber to the home overlay project, installing a parallel network to the existing copper network. And I can tell you that aerial plant (telephone poles) is cheap to install, but very expressive to maintain. Underground plant is immune to nearly everything but backhoes. Cities existed before telecom, for the most part, so most cities use aerial plant. Suburbs are installed in developer provided conduit, most of the time. Way cheaper to maintain. That's power and communication infrastructure.
Street construction costs are determined by access, and distance to quarries and asphalt plants. These are economical only where land is cheap, I have never seen either in a city, usually the costs are high enough to have quarries on several sides of a good sized city, because it is worth opening a new quarry rather than haul gravel across town. And the farthest point from quarries is going to be downtown. Then factor in how much work it is to clear everyone and everything out of the way to repaved. Crews in cities have to coordinate this months ahead, and it causes such an uproar that patching potholes is the common practice, rather than trying to get all the equipment in to repave. Thus the pavement in Seattle that makes my gravel driveway seem smooth.
Water and sewer? These are sunk costs, and you have to maintain the system that was installed. The city of Everett just finally dug up the leaky water mains on marine view, about 10 years ago. They were made from creotsoted wood. Hollow log mains are not as rare as you would think, and still serve in lots of systems. They leak, they rot, and they only get replaced when they leak so much they open up sinkholes. Suburbs have more modern pipes, less maintenance, less waste.
So what's left of infrastructure? As near as I can tell, symphonies. Seattle has one, Marysville has a few HS bands, so yeah, cities provide a better product there, hands down. Other than that, though, I can't see anything cities do better or cheaper than suburbs.
Rochester NY has lost a bunch of citizens over the decades. I imagine it would be a good model for what happens. I have never been, I only know it because that is the HQ for the company I work for, and I looked up the wikipedia page. Anyone been to Rochester? Anyone know how this worked there?