When a large number of people occupy an apartment to the point where it's cramped and can lead to feelings of being trapped and claustrophobic.
Apartment overcrowding can involve having more than three people in a single bedroom, other open areas such as the living room being used as a bedroom, having very limited privacy due to the large number of people in an apartment, and having many house restrictions set by the main tenant(s) of the apartment, which is especially true if the apartment is being shared by other strangers. It can also result in large numbers of cars parked on nearby streets on blocks that have several apartment buildings.
Some landlords have tried to combat this by setting a fixed limit of the number of persons that can occupy an apartment depending on the size (such as 2 people per bedroom, 3 per bedroom, 2 per bedroom plus one), but it isn't legal most of the time and violates the Fair Housing Act.
Person 1: What kind of apartment should I get?
Person 2: Just make sure you have enough space for whoever plans to live there.
Person 3: Yeah, try not to be like those people in Santa Ana, who have many problems with apartment overcrowding and have as many as 10 people in a one-bedroom apartment and sharing with a bunch of strangers. Living like that is so difficult it's not even funny.