Most of the cost of a home comes from the land sale itself, unless if you're building somewhere nobody wants the land (in which case there's nothing nearby to earn a living by as well). Considering that, building larger will only marginally increase the price. Doubly so if the larger building is for more than one resident.

A pair of townhouses can be built for almost the same cost of a single typical single family house, yet house two families on the same plot of land. A condo or apartment can house dozens for the cost of less than 10 normal houses.

Not to mention the reduced cost of plumbing and heating if you build one large building for a community rather than having dozens of separate systems for individual shacks.