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This would be fantastic if it were arranged in a mixed-type development to include apartments, small homes, larger homes, and commercial. Plopping a bunch of little houses into a single space is just piling the less advantaged on top of each other so you don't have to look at them.
Thank you, I came here to comment something similar myself. The real issue is the land these properties are on. If they're crammed next to each other like sardine cans, you're not giving them the opportunity to say have a yard and a dog. The idea of having a backyard barbecue at a place like that is likely out of the question as well.
The size of the house itself is perfect for some people, like me and my partner for example, but the size of the property likely is not. I'm okay with living in a small space, but I'd also enjoy having a small amount of privacy as well as a yard to grow vegetables and native flowers. Further, my partner needs a service animal desperately, but she needs a medium sized dog like a lab or a retriever to stay balanced, but we understand its unfair to try to live with a dog that size in a tiny apartment without a yard and the nearest park a few blocks away. As a service animal, its quality of life matters as well.
If we're just sardine-canning these places, they may as well be apartments or condos anyway.