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Very difficult problem, but I too think that a statewide mandate is unlikely to be a good solution, local perspective is necessary.
I live some miles west of @JasonF and my neighbors would scream bloody murder at the prospect of MDUs replacing homes. OTOH, smaller homes that sell in my neighborhood frequently get bought by developers who raze perfectly good stock in order to build something 3x the size and 10x as ugly, so if an MDU were well-designed I might consider it less of an eyesore. And the light rail system is only a mile+ walk (might as well be 10 for a majority of Angelenos).
But density can increase in various ways. One solution I have seen in a neighborhood just to the west of us is to split a single family lot in half and build two houses, each of which is larger than the single home that was there previously since they're 2 story. These are done with good design and still provide a similar sense of space to the owners, though of course the yard is smaller. There is enough street parking in this area to deal with the expanded density, though I'm not sure that would be the case were every lot converted in this way.
It also seems apparent that there is and will continue to be a significant glut of commercial real estate. I don't know enough about construction to contrast the cost of repurposing these spaces to housing versus the cost of demolition and new build, but I'd be surprised if it's prohibitive. What had long been a mall in my neighborhood is in the process of being turned into commercial space, leased by Google … who, I understand, is now trying to get out from under the decade+ lease they signed. Many of these commercial spaces tend to be close to public transit and amenities which make their repurposing even more attractive.
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