You don't even have to give up driveways and garages; it's entirely possible to build townhouses (row houses) with a 1-car garage on the ground floor. I lived in one of those years ago: the "main floor" (as seen from the front) was really the 2nd floor, and the basement floor had a 1-car garage which opened out to the back. It's entirely possible to build lots of these in cities and get a good amount of living space plus room for a car. Just look at the "brownstones" in Manhattan NYC; those things had tons of room in them, but were narrow so you could pack a lot in a given space. They had so much room that these days most of them are split up into 2-4 separate units and rented out.