As I see it, their only other option is to uproot themselves and move to smaller cities with affordable housing like Rochester, NY, Columbus, OH, Hamilton, Ontario or places in the south like Georgia or Texas.
However, many people are entrenched in their communities and do not want to move away from friends and family and the religious infrastructure they enjoy and are used to (with restaurants and shuls around the corner). They are adamant about living in their desired city or neighborhood. Thus, it is likely they will never upgrade to a house because financially it will be out of their reach.
Unless they follow the trend that can be seen in the secular world: moving back in with their parents. These young frum people are married with children, but the only way to live in a house in their hometown might be to move into the large home they grew up in – and possibly be joined by married siblings who are in the same boat.
I believe that it is simply a matter of time before multi-generations living in close quarters are the norm again. Large single-family houses will eventually be converted into 3-4 family apartments and occupied by married siblings and their families. If they want their children to attend the shuls and schools they identify with, dividing a home – perhaps their parents’ – may be their best option.
There are homeowners who have divided their homes into two or three separate apartments that they rent out to strangers. In a few years it might be their own children moving in, either rent-free or at a low rent so they can save up some money to possibly buy their own home.
Housing for young couples is on the minds of many parents and that, I believe, is a contributing factor to the shidduch crisis. In Israel a suggestion is often turned down immediately – despite the girl having “alle myles” (looks, personality, a good job, yichus) – if her family cannot guarantee an apartment.
There is no easy answer. Living in a very crowded apartment, or living with parents and siblings in a sub-divided house, limiting the number of children to two or three or moving away from everything familiar but living in a large house with a front and back yard, are not easy choices.
Something to consider, however, is this: Once upon a time, every large frum community was actually quite small. And there were a few brave pioneers who left their “comfort zone” and brought their Yiddishkeit with them, enhancing new communities and motivating others to join them until there was a need for more yeshivos, shuls and frum-oriented business which ultimately led to thriving neighborhoods. Some towns in New Jersey come to mind, like Elizabeth, Teaneck, Passaic and now Waterbury, Connecticut.
On the other hand, our great-grandparents adapted (they had no choice) to the very close proximity of their extended families, enjoying grandparents, uncles, aunts and cousins who surrounded them.
Ultimately, every family will have to figure out what will work best for them.