There are a bunch of issues bunched up together here. Large houses are not only possible with good land use patterns, but as older cities grow the average unit size also increases. When I was young we moved from a trailer into a huge old house. It was difficult to keep up properly and seemed to always need to be repainted, but having plenty of space and more rooms than we actually needed on a regular basis was hugely liberating. With careful planning, construction, and use of materials it should be possible for most of the population to live in relatively large residences. This might be beneficial enough to specifically aim for as we make social and technological progress.