There's a bunch of people living in cities that they'd rather be towns than cities :) Heretaunga Hastings is working through stuff like that but has made a lot of progress. Lots of new infill developments are walking distance to the centre, there's reasonable public transport and will be 2 story with small or no section. Sounds puny, but compared to most houses round here 2 stories is up, not out :)

They're also trying to work on getting more apartment style stuff right in the centre as well, it'll take a while and a fair bit of effort for folks to embrace it but proper cities are vibrant and exciting because people live and work in the middle of them.