Option #1: Stay where we are. Deal with the lack out outside, realizing it's just the trade off for living in this part of the city, which we love, and in the house to which we dedicated so much time, energy and resource.
Option #2: Move to the other city neighborhood, sacrificing some house and atmosphere for the outdoor space.
And then we have ...
Option #3: The most practical. Stay. Wait. Bide our time. Be responsible. Save money. Eventually be able to find a house, in our current neighborhood, one that has more outdoor space than we have now. Hope that it won't be ten years from now, and that we'll still have kids actually interested in being outside.
Of course, It would never be as much space as option #2, but it certainly could be a happy medium. The biggest drawbacks are timing and money. There are very few houses in this neighborhood that sit on a large lot. Thus, they're rarely available, and they cost more.
It's been really helpful to me to think through it all by writing it out, and I expect a decision is forthcoming very, very soon.
Probably by my next post (hint, hint).