The cities of the 1920s where absolutely horrific places to live. They were filthy and polluted. People fled them to the suburbs for a reason: because they were terrible.
That doesn't have anything to do with transportation though. You could also die of a kidney stone in the 1920s, but it isn't relevant to the public transportation that existed.
All of the reasons cities sucked are relevant to the decisions people made to leave cities as soon as cars made it practical for them to live outside of cities.
Housing was a lot denser in cities back then. Lots of low rise appartenant buildings, tall skinny houses built right next to each other, and trams running on the major boulevards. Appently modern fire codes killed those building designs though? And lobbyists killed the trams.