Well that explains why every time my husband and I watch something like "Supernanny" (which we don't too often, really!), we figure they've transplanted some family into a large new house with a big yard for the sake of the show. We look at it and go, "There is absolutely no way a garage door repair man, his stay at home wife, and their 3 kids could possibly afford that place." I did a quick look at our real estate listings and for $225, 000 (the Canadian and US $ are currently about on par) you can get a deeded lot in a nice trailer park (trailer not included) about a 2 hour commute from downtown, or you could have a 1000 sq. foot 30 year old townhouse a little closer in, if you don't mind not having a yard. Apparently families who own detatched homes here spend 70% of their gross income on housing (townhouses and apartments aren't quite so bad). Some people manage to afford them with a little help from bank of mom and dad (or GRandma) who managed to purchase their own home before things went totally bezerk. We have a lot of extended immigrant families too who all pool their money together. Also, secondary suites which are rented out are common. Others I know have the parents working their tails off 6 days per week, long hours to pull it off. Not many stay at home moms, needless to say, and people here have fewer kids than you do in the U.S. Food is more expensive too. That said I cannot complain too much, as our lifestyle is pretty nice, even if you don't have much.
A housing co-op is a townhouse or apartment complex that has arranged a mortgage setup with the government (there are various programs). A number of the units are subsidized for low income earners. The rest of the members of the co-op pay "market" rental rates (such as our family). It's actually cheaper than market though due to a combination of a mortgage deal with the government, the fact that there is no landlord looking to make profit, as we all own the co-op in common through the purchase of shares - really just a somewhat larger damage deposit, but that ownership is not of our own particular unit and it doesn't allow us to sell anything other than the share (and this is not for profit). Finally, while the bigger complexes such as ours does have a management company, the members are all required to reduce costs by participating in the running and maintenance of the complex, without pay of course.
I remember listening once to an audio recording by a priest with a large family. He found it ironic that in this age of great wealth, where we can buy so much more than we could in the past, family insist they cannot afford to have kids. I understand his point, but he also has to remember that basic standards of care and supervision for children (and I'm not talking about the purchase of video games and trendy clothes) are MUCH higher than they were in the past. There are many deprivations in the way of food, housing quality (eg. no central heating, problems with extensive mould, falling down walls), or laxity in supervision (in the sense of e.g. sending your small children out to play for hours on end without supervision so a housewife could get things done) that today we would consider child abuse or simply irresponsible that were considered okay in the past.
Your point about population shortages here is why I think governments will do what they can to discourage moms from staying home with their kids, as they need all hands on deck to keep the economy going with difficulties with population growth or even maintenance.