You may be able to get away with it with just adults. Kids talk, sooner or later some 'well meaning' individual reports them to CPS for 'inadequate shelter' and the whole thing destruct.
I feel very fortunate to live in a Midwestern small city, to have bought in 2014, and to have the skills and tools to fix up a foreclosure with lots of problems, so that I can live within 5 miles of my parents (so that my son can grow up within 5 miles of his grandparents). That 5 miles, though, is a car trip, because their house was $145k in 1995 and is now worth some $700k. There's no way as the sole breadwinner that I could buy a house within walking distance my 6-year-old's grandparents (my parents).
While you are right that perspective was taken from that of a millennial, the parents you speak of were the grandparents in the discussion. The kids are the children of the millennials. While it is true that some millennials do have adult children now, it is not common. Most millennials with children have children who are not yet adults and there is a general expectation that said children will live under the same roof as their parents.
And yes, that is most likely what the GP meant, despite the earlier discussion which already setup the context. Which is why we’re joking about it.
side-note: one of the convicted defendants in the USC pay-to-play scandal paid a couple of hundred thousand dollars for their two kids to get placement in a prestigious college. His job title? Director of a property title clearing house in San Diego county. hundreds of thousands of dollars in "envelope" money.. get the idea of how profitable it has been to do this real estate market stuff ?
Early settler homes were typically a single room and not much bigger than a modern living room, and they had many kids living there. Space is a wonderful luxury, but hardly a necessity.