The key is always setbacks - if you have to have ten feet on each side of every building, you can only get "so dense" without going for apartments that consume an entire block.

The problem is introducing the zero-setback designs organically - as the people there likely receive little to no benefit, and the people who do receive the benefit aren't there now.

E.g., a house could easily be fit between mine and the neighbors, but we wouldn't really benefit from the density improvements, and the family that would move into the "missing middle" doesn't currently exist here.

I'd love if our lot was zero setback, as I'd build an addition right up to the property line instead of having to try to find another lot/house in the area we want.