Toronto expensive? Not when compared to Manhattan. That small island has 1.5/1.8 million people and a lot more expensive than Toronto especoaly in terms of what condos go for. Plus how many houses exist in Manhattan? Are they not all apartments/cpndos?
This must-have-a-house-and-backyard-and-two-car-driveway mentality is very much a creation of the car culture, especially in North America, especially post-war. Before the war, I am willing to bet that most people either lived and worked in small towns built around farming or local industries or lived in apartments in the city. In Europe, that was most definitely the case. Even in Montreal and, as Palma points out, Manhattan. Both built up, possibly because they are built on islands and that limited sprawl.
In Montreal, you have a lot of duplexes and triplexes, the sort you see in the Beaches in Toronto. Big two and three bedroom flats that can easily accommodate a family. And, back in the day, when families were larger, nobody thought twice about having to share a room with a sibling or two.
When I moved here, I was shocked by how much more expensive it was to live here than in Montreal. (The differential is not as large now.) But, rather than change our style of living in a walkable neighbourhood, we bought a narrow semi in Riverdale and adjusted.
I bet that, if more family sized condos were built in walkable neighbourhoods, or closer to the core, lower income families would move in -- assuming they can ditch that MUST OWN PIECE OF LAND mindset.