“Small standalone homes is not profitable for builders” is only a “fact” because government policies, banking policies, and corporate practices made to so. That’s like people in the 50’s saying it was a “fact” that people of color bring down property values when that was only a “fact” due to the government’s and bank loaners’ practices of redlining.

Do the math. It would often be more profitable to sell four houses on four small lot than one big house on a huge lot. Or to build and sell or rent out 8 condos instead of one house. But in many parts of the U.S., zoning laws prevent the former. That’s the case in the rural area where I live: a lot of areas outside of town are zoned for 5+ acre lots, which has led to big, multimillion dollar houses on big lots. The end result is lots of trophy homes that don’t even have plowed driveways in the winter, while people who live and work in this area have to pay $1500+ just to rent an apartment. Even professions and doctors are having trouble finding a place to live. I live in an older subdivision that preceded the 5-acre ordinance and which was designed for summer and hunting cabins. But now people live here year-round because it was (note the past tense) one of the last semi-affordable places to live. It’s become a sought-after neighborhood, and homes have greatly increased in price. So it’s definitely not a matter of lack of a market, and it’s not even a matter of lack of profitability.