My parents have recently divorced and I chose to stay with dad. Our family home was quite big, with a yard, patio,… now my dad rents a studio - we have living room, kitchen, bedroom (1 room) + bathroom + balcony. I actually really love it, it’s very cozy, intimate, nicer location, easier to clean, less clutter…
I’ve lived in super dense urban housing my whole life (Europe) and hardly ever known my neighbors’ names. Ask a New Yorker if they know their neighbor’s name! But sure, your general point stands.