This model does depend on the idea that most homeowners think that public transit will bring poor people and/or crime and thus would lower property values. There are lots of examples of homeowners blocking transit and then complaining about traffic.
There's a lot of evidence for this in the '70s; this was super tied up with wanting an ethnically and economically homogeneous neighborhood. it explains a lot about where VTA goes (and why we have VTA in the south bay and not BART) The evidence for this is not as strong now.
>because public transit tends to increase nearby property values
Do you have references? my impression is the opposite.
Do you think having a bus stop out front would make the average suburbanite want to pay more or less for their house? My guess is quite a bit less, but I also don't have references to back up my impression.
(I mean, I think this is changing in the most urban areas. But I think that in the case of the homes of a majority of Americans, nearby transit lowers the sale value of a home rather than raising it.)
If people were purely economically rational actors, maybe. If they own a home they already have adequate transportation for themselves 99% of the time (only exceptions I am aware of are aging suburban populace who can no longer drive) and often don't want to pay for what they don't need or believe the expense will be greater than the gain. Maybe if traffic reaches a critical mass such that transit becomes the quicker option and roads aren't remotely viable.
Second there is an all too common ugly undercurrent of bigotry viewing it as bringing "undesirables" that they worry will lower it or negatively effect their lifestyle.
