I think the answer to this is to adopt Land Value Taxes. This would naturally incentivize property improvement and dis-incentivize people from owning large swaths of unproductive land. Communities would grow upward before they grow outward. Infrastructure costs would drop significantly and communities (over time) would become more walkable.
It'd be fantastic if we could persuade some local governments to try this and work out the bugs. If it went well, it could be adopted by more and more locales.