Ban building new office space in overcrowded areas. Big corps will be forced to build their offices elsewhere, in remote areas with plenty of land, workers will follow and so do small businesses.
1. Who would pass and enforce such a ban? Local governments are self interested and want more jobs, because it makes politicians look good and jobs require minimal additional services while providing lots of tax money. (See: Bay Area) State has same issues. Feds don't have the rights to do so, and good luck passing that kind of legislation anyways.
2. With the decline of the inner city during the midcentury we already saw what this looked like. It mostly resulted in jobs moving to the suburbs of established big cities, not decentralization of jobs into totally different regions.
What is the definition of overcrowded? Banning office space caps the size of the economy! A very bad result for a nebulous gain. That's like hoping for a recession or praising Gary, Indiana and Youngstown, Ohio for low housing prices.
They choose to set up shop in big cities and in CBDs because there's more opportunity well worth the higher rent. High rent makes buildings more productive because no one is going to waste prime real estate on low productivity or land intensive enterprises.
Some cities are pushing to ease car dependency by mandating businesses support remote working, not further invest in parking, and encourage walking, biking, and mass transit use. Those are ways of improving the land efficiency of businesses.
The gov is able to limit density within the office buildings, so it should be able to limit density within the county limits. I agree, though, that such an initiative would be against the interests of just about everyone, except the future workers who don't exist today and don't have the right to vote.
Considering how many people insist on their neighborhood staying the same, why haven't they thought long and hard about what it means to let more and more corporations settle in their city without building enough housing to match the new jobs?
They don't care. Ideally their community can reap the jobs, retail services, and tax base that businesses represent while pushing off housing demand and public services demand to somewhere else. California has an extreme version of this through Proposition 13 which eliminates increasing property tax revenue base as an incentive to approve housing construction. Thus housing is made a "cost center." The end result is essential workers have to commute an hour or more one way to work in the communities they can't afford to reside in.
