https://en.wikipedia.org/wiki/Missing_middle_housing
Efficient and healthy land use for housing was solved in the 1900s - we don't need tiny homes.
In England, row housing is quite common and that seems a good compromise between density and comfort.
I live in an apartment block in Spain and it's quite a lot worse than even row housing due to noise from neighbours, lack of parking etc.
It's okay for young people, but it'll be hard to raise a family in, which is probably partly why we have such low birth rates here.
For some reason people believe that a little baby is the most noise possible and it's often used in such discussions as an evidence of complete sound-proofing of their dwellings. While people do instinctively get agitated from a child's screams the power of these screams is very low. This is why parents get baby monitors as the screams don't propagate well even between floors in a single-family house. Even adults, unless trained, can't scream nearly as loud as a 200W Bluetooth speaker. Get your neighbor upstairs to drop an empty barbell bar and see how you won't notice it. And in the US your neighbor can be dropping a 300 pounds barbell while having a party with people dancing with accompaniment of 2.5kW sound system, at 2:30 am.
In England, the new-build homes are often of a far inferior build quality to the older ones built after the war.
All sorts of feasibility studies. Options.
And then out came the NIMBYs. "My grandkids play in the street and I'm scared they won't be able to anymore", "there's going to be cars parked everywhere on the street and we won't be able to find parking" (uh, you have driveways and garages, no?)
"What's this going to do to our property values?" This was the kicker. "Well the most conservative of our studies showed that it looks like we'd go from 11% YoY value increases to 8-9%."
Wow. You would have thought the city was pouring water in everyone's gas tanks, or assaulting their grandmothers.
"HELL NO. I have a right to double digit property value increases!" Even when the lower increases would still be in the top 20% of property markets in the country (and being clear, still an 8%+ ROI), no way in hell were any of those proposals going to pass.