I’m not from the US, but I’ve heard about the housing shortage crisis as well as the commercial real-estate vacancy crisis. I’m pretty sure the US government will bail out the rich folks again.
Honestly, people need a cheap place to live, right? Why not just buy a commercial property about as big as an ideally small home and call it a day? Isn’t that a win-win situation? Or are there laws that make it illegal?
My understanding (could very well be wrong) is that a plot of land must be zoned at or above the intended use. It’s for the purposes you said (and particularly for maintaining home property values), but there’s a hierarchy. If a place is zoned residential, you can’t open an office building, because offices are a higher zoning class. Above that is industrial. But you can also use it for lower purposes, such as residential.
As for services, that really is highly dependent on your locality. Downtown living has been a huge trend in my area. High-rise condos (very expensive ones at that) have been built right next to the office sky scrapers for well over a decade. A lot of buildings were designed with the ground floor being retail traffic (restaurants, sometimes offices, etc) with residences above. This all happened before COVID.
I don’t think they’re a good fit for a family with kids, but clearly they have these things already figured out.
According to the same wiki article, the hierarchical version you mention of Euclidean Zoning (named after Euclid, Ohio) fell out of favor in the US for flat zoning, which is much more restrictive. But since it’s always locality dictated, it’s always different wherever you go.