Builders don't want to make a 150k home when the initial costs (mainly time) takes the same amount as a 400k home. So builders themselves don't want to build starter homes anymore too.
https://www.strongtowns.org/journal/2017/1/9/the-real-reason...
Still, many tiny homes projects are unlikely to be generating tax at all, at least those run by the charitable sector. However they can significantly reduce municipal and provincial spending on the needs of caring for the unhoused population. So they are likely to be a net benefit to government budgets.
As for SFHs in the surburbs, there are alot more variables to take into account, especially where do people esp families geniunly want to live. I don't see cities and families co-existing.
the strongtowns website gives me strong "you will own nothing and be happy" vibes anytime they come across my feed.