> Over time, people will make decisions about where to live based in part on the presence of public transit.
I live in Germany where transport (around here) is almost free ($70 per month flat fee). When we bought our house we did buy it in a town on the train track. This helps with public transport, but the property prices in our town is 30-40% higher than in off-the-track towns.
There are also other things. Our town has a much larger area of light industry than neighbouring towns, mostly because it is close to the tracks.
This means there are more jobs, which also send the property prices up. The towns away from the line do, in 2015, still not have broadband Internet. And I have known people who left there because of that.
So in short, people do select for public transport. They also select where they live because of the run-on effects of having transport connections in the frst place. But it also causes problems, especially if the public transport hub happens to be a major train line. The line here runs between Freiburg and Basel is the most frequented line in Southern Germany.