Oddly enough it's often cheaper to spread out. When you get as dense as NY it's a lot of work to add say a new water pipe, or electric wire. You have to shut down streets, etc. It's a major hassle and expense.
Plus you waste massive amounts of time just getting anywhere (too much congestion, both for humans, cars, and even services like pipes).
It's cheaper to spread out a bit - not too much, but not as dense as NY. I think the best amount is those houses with large yards that you are talking about.
- Big houses with big yards. This makes cities way bigger, expensive to build infraestructure for, and makes us depend on cars.
I bet that, If we all lived on smaller houses our living expenses would be way lower. Has any city tried this?