I read it as requiring multi family residences, which would be extreme and unwanted by all.

No, it would only ban zoning that allows only single family homes, as zoning laws often do now. It would not require multifamily homes. The article points out that similar laws in California so far have resulted only in limited change to home building.

solarmist is suggesting the title sounds like zoning now forbids single-family houses, whereas it actually bans requiring single-family houses (ie them being the only type of residence allowed).

I thought that's what "single-family zoning" means: a requirement to have nothing else besides single family houses. Eliminating this category of zoning means you can no longer mandate "only single family houses".

I'm unsure if zoning laws behave radically differently, but I'm thinking the best model is what they have in Japan:

http://urbankchoze.blogspot.com/2014/04/japanese-zoning.html

Things that can only be built in "low rise residential" zones can still be built in "neighborhood commercial", etc. See chart:

http://1.bp.blogspot.com/-sV5ETXDs_8M/Ux-axBTuF2I/AAAAAAAAAs...