I feel like this whole effort is not a technical problem but a cultural and financial issue. I don’t think the problem is whether it can be done, but whether the tax structure is in place to encourage it.
It's actually at end the of the day a legal problem. Building codes and fire regulations are very strict on what you can and cannot do, and most 'good' ideas people come up with to solve these problems end up being against the building codes. Without changing the building codes it doesn't matter how clever your technical solution is.
I signed that "right" away with the county recorder, it was no problem. Been able to do that for 2 decades in my county. Turns out when people build what they like you get weird shit but little to none of the "but muh codes" fire hysteria came true.
Meanwhile California morons building with regulatory checks out the wazoo get ate up in wildfires. It's like watching actual insane people.
But if you've read anything about disastrous fires throughout history, the reasoning for modern fire codes is rather apparent: https://en.wikipedia.org/wiki/List_of_nightclub_fires
The deadliest structure fires in history pretty much have one thing in common: people couldn't get out. There's something to be said for a homeowner who builds their own death trap, but it's a good thing that large commercial properties have to jump through hoops to ensure they don't create a death trap for hundreds of others, just to save a few bucks.
Wildfires are something else entirely -- forests are not man made and their creation is not subject to laws. You wouldn't argue that laws against murder are silly just because you could be attacked by a wild animal, would you? We regulate buildings because people build them.
Of course the building inspector sees the charred bodies he didn't prevent, but he doesn't see the frozen and exposed ones he created through his policies that handicap supply. The incentives of code and inspection are horribly perverse.
Having built my house the price and accessibility absolutely spirals out of control with code inspections. Remove this madness and let the masses do what I've done.
Our regulations often treat different structures in different places differently because they have different risks. That's okay. Your custom tiny home shouldn't be treated the same as an urban high rise.
There's a lot more to fire codes than just sprinklers and fire escapes. If you could ignore all fire codes (and related requirements) then it would definitely be possible to build both more and cheaper apartments than you can now. Not saying it's necessarily a good idea, and they almost certainly wouldn't be nice places to live. But a lot of people would take unsafe, uncomfortable and affordable over safe, comfortable and completely unaffordable.
But given the demand inelasticity for housing, it's not even guaranteed it would be cheaper.
Most forests today kind of are, in as much that the way a forest is 'designed' is down to a whole collection of active choices made by the forest owners to intervene or not intervene in different ways. There are lots of things that one can do to mitigate the risks of forest fires, and doing or not doing those things is a choice they make.
The vast majority of trees are not planted by humans
The vast majority of trees close to large number of humans are however owned by someone who responsible for them and gets to decide if they grow up and become big trees or not.
In the US windows are also a required means of egress from a bedroom in case of fire. Technically the requirement is two means of egress of any type, but in effect this means the door and the window, where someone can be rescued by a fire truck, escape onto a different path, etc.
Punching through a new set of pressurized, fire rated stairwells would be significantly more expensive.