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Building in the same old ways won't end the housing crisis.
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There's a reason I said "homes with smaller footprints" and not just "smaller homes". To use some unrealistic but easy numbers, an apartment building with 100 m^2^ of land area and 10 storeys, each with one apartment on it, means each apartment only takes up a footprint of 10 m^2^, which is tiny. The same principle applies if you use more realistic numbers.
Or you can go for standalone homes in the form of row houses, which might very realistically have a land area of 70 m^2^ and be two storeys, and so have a very comfortable 2-bedroom 140 m^2^ of floor space.
You're absolutely right that a lot of what we currently build is not good quality outside of rentals to uni students. We need more diversity of housing options, including good apartments and row houses.
I mean if you take that to the extreme you're arguing for very high density living, which I'm not opposed to, but councils seem to be against that by default.
If you only look at this aspect, that's true, with an asterisk*. But there are other factors that make medium density really good compared to both low density and high density. Factors I'm happy to get in to and have done many times in the past, though it's a little off topic for this thread.
* the asterisk is that depending on how you build the very tall towers, their density can end up being quite comparable to that of medium density. The so-called "tower in a park" layout, where you have large towers with a good amount of green space (or other open space) surrounding them ends up not too much greater in density than straight-up medium density.