Mostly, it was intended to be a tax on, and a brake on, commuting, to prod people to move close in, into those giant tenements -- oh, excuse me, I meant "luxury apartments" -- you referred to.
Ever see Blade Runner? Have another look. Take a good look at the scenery.
I can see what you are saying. There does seem to be a move to encourage a tightening in of the population to be "in closer" into urban centers. But people travel for a great variety of reasons, to go to a doctor for a second opinion, see a play, any number of other things. It will do more than just "reduce traffic". It will cut into the ability of free people to do as they wish with their lives.