If I may quote Wikipedia: "In Roman architecture, an insula (Latin for "island," plural insulae) was a kind of apartment building that housed most of the urban citizen population of ancient Rome, including ordinary people of lower- or middle-class status (the plebs) and all but the wealthiest from the upper-middle class (the equites)."
The reality of modern Rome is not much different. You will certainly not find the traditional Australian quarter acre block with a front and back yard in Rome; the population is far too dense and the area far too constricted for that. Mind you, they're a dying breed in Sydney as well. Most people live in apartment blocks like these, and there are building regulations to ensure that there will never be the towering steel and glass creations of cities like New York (or London, or Sydney, or Melbourne) here.
We stayed in a place not completely dissimilar to this after our package tour had ended. I've stayed in far, far worse places. The morning light is just hitting this one, which unfortunately is not as obvious as I thought from the thumbnail.