Low density of other children nearby and inability for children to safely travel on their own is not family friendly. I agree that if we only build one and two bedroom apartments its going to discourage larger families, but there is no reason we can't build denser three or four bedroom housing.
Though honestly I think the entire premise of this article is flawed. Cost of housing is only one of many factors. Cost of having children is higher than ever before, which housing can play a factor in.