Moving the baseline like this would certainly help. It's also helpful to think about areas that are already a little denser than SFH. Replacing duplexes with small apartment buildings and medium apartment buildings with high-rises would have a much bigger impact and this proposal would make that possible as well.

The part I wonder about are provisions for mixed use. At some point some business should be allowed. I think Japanese zoning has a linear system that covers this: https://www.rahulshankar.com/zoning-in-japan/