If society just thought paying interest on your house was another form of feudalism and refused to play along, I expect you'd see more of your type of city and less of what we currently have.
The difference in price tells you what people want. Dense urban environments are vastly more desired than freeway sprawl. The group participating in local politics and writing the policies that entrench freeway sprawl are not representative of housing seekers as a whole.
Not just paying interest, actually paying whole mortgages for other people. Since the financial crisis of 2007 it's unrealistic for most young people to save to pay a deposit on their own mortgage. Where I live they want about 5 years of gross minimum wage just to take out a mortgage.
If society just thought paying interest on your house was another form of feudalism and refused to play along, I expect you'd see more of your type of city and less of what we currently have.