You know, like when we built a ton of social housing in the 60s.
Enforcing the flatshare life on everyone is about the worst idea I can think of.
edit: build up, build out, build down, do whatever. I'd prefer normal homes with gardens and I think most people would - I see no reason to limit ourselves - but right now we could do with anything. Shuffling the deckchairs solves nothing.
There is nothing in principle preventing us from building rows of town houses again and giving families somewhere to grow and live. We don't need to handicap ourselves with Dickensian/third world notions of one room per person.