We could build roomy apartments with private outdoor areas that would still be more space efficient than a normal house.
I wouldn't mind living in an apartment, a backyard isn't a huge priority and these are perfect for single people, couples and small families.
The key thing is that an apartment and what your perception of an apartment is aren't the same. There's nothing that says it has to be this way.
Why would a commercial (or government) development project invest in something unprofitable (or unnecessary to their requirements)?
A state-level entity could mandate it as part of construction code for 2 reasons:
1) Even the higher construction-cost apartments would be more financially solvent over the long-run than continuing to subsidize the alternative rural or suburban lifestyles.
2) Having nicer attractive apartment lifestyles would entice more people to move to more sustainable urban areas rather than the environmentally and economically unsustainable rural and suburban areas.