You never could. Before suburban mass transit became a thing, enabling low ~80% of Paris workers to live outside and commute every day, they had to live in Paris. They all lived in communal apartments, several unrelated people per room, in most awful conditions imaginable just because of density (see "Down and Out in Paris and London").
Also, Paris is an extreme example. There's plenty of mid-sized cities (400k to 1 million or so) in Europe and presumably elsewhere where you can live in a quiet space, maybe even have access to a garden, and hop on the tram or your bike, and be downtown in 20 minutes, without parking lots.
So, you can definitely have both. These places exist.
And no one is going to build public transport in them in US now - people all flock to megacities, these small places are all bleeding population, population there gets old, and tax sources are scarce.