That represents a more substantial change to the property. Subdividing may not be possible, significant changes to sewer, electrical and water metering. If you've got a parking lot that is shared then there is more of a challenging for its maintenance (e.g. condo fees) which represents more overhead.

In the SF world, going from RH-1 to RH-1S is is a much easier change than RH-1 to RM-3.

Subdividing an existing lot further can get into difficulty in some areas with minimum parcel sizes. For example, in Chicago https://secondcityzoning.org/zones/ you can't have a parcel smaller than 1,650 sq ft.

Switching from owner occupied property to something that is a commercial apartment structure can also impact the financial security of a household (you can't evict me from the house I own vs falling behind on rent because of a layoff).

We do need higher density and less impacting houses - but this isn't a simple "tear down the house and build four smaller one" changes for most urban and suburban places.