Author here: most people know that the city is "more" valuable, but drastically underestimate how valuable. I've asked people how much more valuable they think Manhattan is than the Bronx and they will say things like "5x" or "10x", which is off by an order of magnitude.

They also underestimate what this means. In many cities you can have 50%+ of land value concentrated in a rather small portion of area, and this has huge implications for what would happen is you, say, changed property tax policy to shift the tax burden towards land and away from buildings. Most people assume it would kill the suburbs, but in many of our models single family homes come out slightly ahead, or stay neutral.