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The roads fall apart, foliage grows over stop signs and such, and newcomers don’t want to buy into existing areas - they’d be the suckers paying far higher property taxes than their established neighbors. In CA this wasn’t a problem because a whole new neighborhood would spring up a little further down the road; there is plenty of space.

I'm not seeing the logic in your argument. In CA there is a lack of space. Housing situation is in crisis mode, as there is a lack of space to build near where the jobs are located. Lack of housing is causing workers to commute more than 100 miles to their jobs. I doubt this is happening in NJ. In the SF Bay Area, there is little space for new building, few empty lots. So they're building high rise towers and creating crowded conditions with massive traffic problems. Neighborhoods are fighting local city councils regarding high rise towers; we don't want them replacing single family homes. We just lost a fight in my neighborhood where we have 1 to 2 story homes, a developer wanted to build a 16 story condo tower about 4 blocks from me, city council got them to reduce to 8 stories for 800 residents. Two other high-rise developments planned on the two surrounding blocks. Lack of space is causing developers to build upwards. Too many newcomers, we wish they'd go back where they came from.

As it was explained to me, the new housing is just built further and further out - where there are no “legacy” homeowners subsidized with low taxes by newcomer suckers buying in later; sounds like this is exactly why people are commuting 100 miles to their jobs. The “build upwards” you describe is in the cities; my friend was describing issues in the suburbs (growing outward, away from the most “heavily developed/highest penalties for newcomers” areas.

Does that make sense?