Suburbs are subsidized by urban areas. Zoning in North America means medium and high density can only be built in limited locations, meaning demand often outstrips supply, increasing the price. The decision of "house with land" vs "tiny apt" isn't a direct comparison and price influences people's decisions. If these perverse incentives weren't in place, more people would consider living in higher density areas with more amenities vs having lots of land and being far away from everything.