Tim, just to add to my earlier post...
I am not concerned about price, I'm talking strictly about limited amounts of land. Vancouver was 1.2 million in population in the early 80's, 2.5 million in 2016 and projected to be 3.7 in about 20 years.
Houses are now being built with mortgage helpers and coach houses to increase density, but I have yet to see the idea of building multi-family homes stacked on each other as an alternative.
Taking price and empty units out of the equation, it still makes sense to provide an in-between option to those who want to live close to the city, have space, but not necessarily as a single-family unit.
Living in a very dense part of a dense city is a nightmare to me. I could only enjoy it for a short while, not longterm. I'd never want to raise a family in the kind of building/environment being described, it sounds like a dystopia to me. I like some space to breathe, I think a lot of families like so too so the idea wouldn't be popular unless housing prices in place like Vancouver make it necessary.