It’s more interesting to ask why people don’t want to live in multi family dwellings. For example, if hearing your neighbors is a big part of the problem, would building code requiring sound baffling in every multi family start tipping the scales? Or if crazy neighbors was the issue, what about legal structures that let residents approve of new owners? (Yes, risky territory, but humor me for a second)

Multi family is generally seen as less appealing. So if you want people to live in multi family, how do we make it appealing?

You can see small attempts at dealing with the problems in e.g. the elimination of shared metering, which invited freeloader problems that simply don’t exist with individual metering.