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Multi-story housing is expensive to build, but those costs, as well as the cost of land, are spread out among more people. The relevant metric is cost per unit of housing. Single-family homes can easily be 3 stories, so it's not even like you're necessarily saving much. The cheapest housing to build in an area depends on many factors, but as the price of land goes up, you would (unsurprisingly) expect taller buildings to become more efficient. To consider the extreme case: Would a single family house in the middle of Manhattan be cheaper than 1 apartment in a building that takes up the same area?
This is exactly why we have markets, so that we don't have to have arguments like this. People want a single family house? Then they should be willing to pay for it at the efficient price. We wouldn't do a survey that found that a car and a private helicopter are not "close substitutes" and therefore we should only build helicopters or subsidize their use.
Are you seriously suggesting that a typical 1,100-ft² (100-m²) apartment in a four-story building is just as attractive for a family of four or five people as a typical 2,200-ft² (200-m²) one-story or two-story house is, when the two options have exactly the same cost? No, cost per square foot is more important.
Specifically, he alleges (again, based only on that one rather shaky source) that three-story buildings are only 30 to 50 percent more expensive than one-story and two-story houses. That's in comparison to 100 percent more expensive for four-story buildings and even worse for buildings taller than that. The (alleged) difference is not insignificant.
I thought that "housing unit" referred to the space that ~ 1 person needed, so e.g. a 2 BR apartment would be 2 units, just like a 2 BR house. However, this does not appear to be the case, after googling, so I'm not sure what term I was thinking of. What I meant to say was something like, "what matter is the cost per person that you can house."
In any event, we can use square footage, but that isn't a perfect metric either: The first 1,000 square feet is much more important than the next 1,000: If you build only 2,000 square foot homes, but not everyone needs or wants that much space (e.g. a childless couple) and can't afford it, then an apartment that is half the square footage might be better, even if it's 60% the price and therefore more expensive per square foot.
The linked presentation isn't clear enough on its own for me to completely evaluate. For example, what math is being done on slide 5? What are the obscured numbers? I think it's saying that you aren't going to get midrises (5+floors) in a suburb an hour's drive (without traffic) from the Bay itself, which isn't particularly surprising.
My impression is that a lot of developers have tried to build denser housing in the Bay for many years, and have been held up by legal challenges, artificially imposed restrictions, CEQA, etc and not by economic fundamentals. And if these types of dwellings aren't economic on their own, why do they have to be banned? Why have so many of them been built in other places, and are continuing to be built, even in cities like Austin, Denver, Houston, etc where land is substantially cheaper?
The density the author uses for single-family homes is 5 per acre. That's actually reasonably dense for such housing; many areas have minimum lot sizes of a quarter acre, half acre, or even an acre. They also claim that housing does generate sufficient tax revenue, but this is only due to the insanely high housing prices. What happens if housing prices come down?
I think most urbanists agree that it only makes sense to build extremely tall apartment buildings in expensive areas, but what is the point of this argument? Again, if it's really the case that small apartments are not economically feasible in areas that are currently SFR-only, then why do they need to be banned?
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