I don't know the regulations of California but where I live the city has prohibited the construction of smaller units (1 bedroom, less than 700 square feet) thru zoning regulation and the existing stock of smaller units has been converted to bigger units.
I think if you look for a general reason why we don't have cheaper housing thru smaller units more suitable for people living alone, you will find that it is the explicit policy of the bigger cities.
The amount of idiocy surrounding one project to build new studios and one bedrooms with very little parking one block away from a train stop in Chicago was maddening. The market wants these units but developers literally cannot build them.
I think if you look for a general reason why we don't have cheaper housing thru smaller units more suitable for people living alone, you will find that it is the explicit policy of the bigger cities.