I see no problems that cannot be solved by a clever design. This is the usual starting point in a tight urban planning situation. If necessary, your preliminary design will have to be revised more or less extensively to ensure sufficient lighting/sunshine inside/outside.
However, it first needs to be checked whether this BV is even permissible in terms of building and planning law ([Bebauungsplan], building lines, building boundaries, floor area ratio/plot ratio, setback areas, parking spaces, access roads, ownership conditions/[Bebauung in 2. Reihe]) etc. There will be some critical points, for example the boundary development with residential use or the undershooting of the 3.00m setback according to [SO]. Both will initially not be possible or must be clarified after studying the documents, through some preliminary talks with the building authorities, or within the framework of a building inquiry.
Basically, the bungalow or a comparable development would be an interesting option.