Government should be active and in charge of urban planning. It is a matter of the common good.
One of the biggest problems today is that urban planning has basically evaporated. Local and state governments don't plan towns anymore. Things are left to developers who have no other concern than to run a street off a major road and plop a few houses down, sell, and move on to the next project. No thought is given to traffic or public services or walkability or public transportation. No care is given to integration with existing urban structures. Instead of mixed-use zoning or building houses around a common public space, which are historically the more common and sensible form of urban planning, we end up with car-dependent suburban dead zones, suburban sprawl.
This should be receiving more attention from environmentalists, as urban planning is intimately related to environmental issues.
I don't know where you live, and this is going to be very dependent on where you live, but in most places that are experiencing these issues I think you actually have the problem backwards. For any given parcel of land, building upwards would be the more profitable move. Local governments deliberately legislate planning that prioritizes single-family homes, cars, and sprawl; developers are then forced to operate within these constraints. They'd rather be building density!
That's not urban planning. That's local gov't creating incentives through legislation and regulation. Urban planning means actually planning roads and distribution of utilities and schools and medical services and shopping areas and town squares and parks and so on. The town takes charge of its own future. Developers must then fit within this scheme. Instead, today we leave it up to developers to design roads and build wherever they want. It's a disaster.
And in many cases, single family homes are perfectly fine. You don't build skyscrapers in the Catskills. So they're not the issue. The issue is how they're arranged. Look at how old towns, even in the US, were or are constituted (at least those that have remained unscathed by Robert Moses-style mutilation). Plenty of single family homes arranged around a discernible town center. Walkable. The density consists of building around a town center instead of building willy-nilly along a road, because some strip of farmland has come up for sale. (This has the incidental defect of building on fertile land, now lost permanently to residential space.)