What’s the surface area of our planet divided by the population? I think it’s about 1 square km per person. Naturally much of that space is not inhabitable[0], and naturally people want to live near to other people.
But that’s a problem with tiny houses: sometimes they’re appropriate but in many intelligent scenarios they are foolish
Edit- I meant that tiny houses may be foolish because there’s better ways to live
[0] probably I’m wrong, correct information is welcome