The market decides. The government shouldn't direct development. This was basically what the Albuquerque Journal editorial board said in favor of approving the pending huge Santolina master plan.
This ignores reality. The market may follow but players arguing for water transfers and new roads determine where land development is profitable. Not the market. The Journal knows this, having successfully manipulated public funding and opinion to benefit their own development interests for years.
Priorities for public works without capital planning, which isn't done effectively in New Mexico, depend on who's asking. The adage about real estate location, location, location, might more accurately refer to location of public roads, water lines and storm drains. Location of these services determine value and profitable land sales. The only "invisible hand" is the one pulling utility strings at any given moment.
Sprawl profiteering is exactly why Rio Rancho wants another road to nowhere paid for by taxpayers. It is not a chicken and egg dilemma. There are no land sales without road easements.* There is no land valuation that wouldn't include the inherent value of various public services available.
The market does not decide. But apparently developers do.
* Except illegal subdivisions like those on Pajarito mesa.