When you argue for housing reform to legalize denser development in our cities, you quickly learn that some people hate density. Like, really hate density, with visceral disgust and contempt for any development pattern that involves buildings being tall or close together.
There’s a vast middle ground between only single family dwellings and only skyscrapers. Duplexes, fourplexes, rowhouses, small apartment buildings are all a good option, and where you’d start in your example town, if there was demand to build them. You currently can’t do that in many places, even in cities, because of absurdly restrictive zoning laws.