In response to the pp... I believe that only applies to government housing projects that are obviously regulated. My dh grew up in a housing project and his Mama still lives there, those are definately the rules. However I don't believe that applies to those who are living independant of a housing authority. (unless maybe DCF is involved with a family as they love to make a big fuss about stuff like that)
To the op... We have 3 kiddos who share a room
Well, technically anyway- our youngest ds who is almost 4 is actually still in our bed but does have a bed in the other room and opts to use the floor in there occasionally :LOL but mostly he is still with us.
We have bunkbeds for our almost 9 yo dd and our almost 7 yo ds (all have b-days soon!) dd has the top bunk and that is her private place. The boys couldn't care less at this point about space or privacy. Up till now we have had no problems at all with them sharing a space, the only thing we've encountered as of recent is dd needing a private place to dress... she has become VERY modest as would be expected with her age and all. She WILL NOT dress in front of anyone, not even Daddy anymore. So she retreats to the bathroom, no biggie. I think if given the choice she'd love her own room but since it's not an option right now it's not an issue. It never gets brought up at all by anyone and they all seem content.
I think it's an issue that will probably need to be guaged individually according to each child needs. Some kids may be able to stay a long time together while others might not be able to hack it. There's always the ever famous personality clash as they grow up and maybe other issues. So all in all I say go for it and see what happens over time, you'll be fine for at least a good 10 years I would imagine.