Sprawl has its own cost growth function. Bigger roads, bigger water distribution, bigger sewers, bigger runoff, etc. And typically you develop the easiest and best land first then expand in the more and more difficult to develop. This inflates costs as time goes on.

You can't make more of unique locations. Dirt isn't the issue, it's location. Times Square doesn't use that much "land", but it's a unique, non-commodity location.

Sprawl in NYC wouldn't create more Times Squares, so in this sense, "they aren't making more land".

There's plenty of land in Siberia. There are very few locations that are in the middle of dense cities.