The Hanging Gardens of Croydon.

The demand for housing in South-East England now far outstrips supply. This is why, before being caught up in one of the now seemingly obligatory sex scandals, John Prescott organised a challenge to developers to design houses that could be constructed for less than £60,000. This was in an effort to increase the availability of affordable houses for first-time buyers. (http://news.bbc.co.uk/2/hi/uk_news/magazine/4749631.stm)
While it is always heartening to see a politician actually trying to solve a problem, rather than merely hoping it will go away, I fear that this scheme ultimately misses the point; it is the shortage of available land which pushes costs up, more than the actual cost of construction.
Logically, the only solution that makes additional living space available without requiring that the surrounding countryside be concreted over, is to build down, into the ground, or up into the sky. Over-reliance on artificial light and the sheer effort of digging rather precludes the first option, which leads me to revisit the 'towerblock' concept. Bad experiences of high-rise living in the 1960s and '70s tend to put people off this concept, as the concrete monstrosities erected at the time created about the least hospitable environment in western civilisation, but there is no inherent correlation between tall buildings and misery- it's all in the design.
A modern tower-block must, in addition to making due allowance for parking, have communal spaces which are light, pleasant and of course easy to police. When it comes to making a pleasant environment, one thing strikes me above all.
Many an inner city resident yearns for the suburbs, and I suspect that, consciously or not, it is 'green space' that they seek. Various studies suggest a link between stress levels and the absence of adequate flora. (http://www.wsu.edu/~lohr/hih/productivity/)

(http://www.plants-in-buildings.com/whyplantsstressreduction.php?PHPSESSID=3acfc0580ee03837fd7a447113b34463) Many people would like their own gardens, but find that this is not practical in the cities. There is in reality no reason why a flat cannot have a garden, other than the additional structural reinforcement needed to support the weight, and the fact that all except the top storey will inevitably have a roof. Of course, suitably imaginative use of mirrors and light-pipes can bring in much of the absent sunlight even with a covered garden, and the difference can be made up with artificial lighting. The lack of rainfall is readily compensated by use of artificial irrigation.

The tops of such buildings could also become communal parkland. With enough such buildings the distinction between town and suburb will begin to blur, and the image of the menacing, inner-city estate can finally be consigned to history.