It's yes and no. Living without cars means housing poverty. There is no way for most families to afford a spacious residence unless they drive everywhere. In Paris, people live extremely dense and housing poverty is the norm of existence (even though people who can buy a place within blvd Peripherique are by definition very rich). Most live there simply because they inherited the place, or inherited a regulated rental contract. It's normal for a person that makes money within 0.1% of French income earners, to live in a Paris apartment that in America, will be most fit for an "immigrant or poor who can't afford a car". So it's a tradeoff. You get a liveable, walkable city where you are an investment banker and live in a 700 fq. ft. apartment with the roaches, or you get to live in a 3000 sq. ft. house but everything around you is just an endless parking lot. You can't have both.

You never could. Before suburban mass transit became a thing, enabling low ~80% of Paris workers to live outside and commute every day, they had to live in Paris. They all lived in communal apartments, several unrelated people per room, in most awful conditions imaginable just because of density (see "Down and Out in Paris and London").