Again that's a wash, though, as long as interest rates on new bonds are not significantly higher than those the city is already paying on its existing infrastructure bonds (or on future bonds that will be sold when necessary to repair/replace the current infrastructure as it falls apart). Sure, high interest rates would provide an incentive against new infrastructure investments, but rates over the past few years have been historically low.

(Also, the effect of interest rates is at most a small single digit percentage, so even if it's not exactly a wash, those costs could be cancelled out by other effects, e.g., the returns to scale on denser infrastructure - you can generally serve 2x the population at less than 2x the cost, but you still get to collect 2x taxes).