If you're worried about household numbers as well like I am, you can do what I did in Veronaville and do mini-legacies. What this means is that you have family members start their own families on their childhood home lot, not moving out. For example, say you have the Pleasants with Angela and Lilith aging up to adults in their home on Sim Lane. They can then not move out, marry Dustin and Dirk, bringing up the head count to 6. This way, instead of playing an Angela-Dustin, a Lilith-Dirk and a Mary-Sue-Daniel household, you do all of them in one go. This can also limit the potential baby count, which is useful if you have risky Woohoo and don't want to end up the personification of the "Omg get off of her" couple from walmart.
This doesn't have to involve literal families either, like, you could have Lilith and Dirk move in with Cassandra and Darren in the Goth manor for example, to avoid the consequences of the Pleasant girls living together. It also works better in Veronaville because of those weird two-in-one house lots: I for instance moved Bottom and Hal with their kid into a lot like that with Puck and Tybalt next door as roommates.
Here are some things I do to keep my Strangetown population from getting out of control.
Each couple can only have two kids, and I then I set Try for Baby not allowed on ACR. I like this because there's still a chance of an oopsie baby via risky woohoo for that element of surprise and randomness, but most couples will stop at two. If someone who already has a child or two becomes widowed or divorced and finds a new partner, they only get to have one child with their new partner. I only let ACR control when they try for baby instead of going through the menu. I find that limits the success rate.
Many houses have around 6-7 people in them. For families, that would be grandparents, an adult couple, and their kids, and maybe a single adult sibling if there are enough places to sleep. This helps me keep the number of houses I have to play from getting too high, and again it can limit kids if you are playing with the household limit of 8 Sims. I also have several types of co-housing, like @sugoisama mentioned. I have a motel where singles live. The Ottomases have a boardinghouse where they rent out rooms to singles. In my subhood, I have multihouse lots where I can play several singles or couples at one time--these are usually Sims I don't care as much about, and Try for Baby is not allowed there, so they can only get pregnant via risky woohoo.
And I have a lot of mods in that make death more likely, like realistic sickness and more dangerous fires and delayed firefighters. The motel is a particularly risky place to live for fires. Seriously ill Sims and those with aspiration failure that is not cured by therapy have to go into the hospital, and that too is a risky place to be. Also, the witches who live in the Specter house and took up Olive Specter's legacy have a cow plant and lethal wishing well, so any Sim who wants to see someone's ghost or drink the milk of someone can get that done, for a price. The witches also will do resurrection if the money is good, but for each resurrection, a corresponding sacrifice is required to be provided by the Sim requesting the resurrection. And I have a werewolf mod that allows my werewolves to kill someone by attacking them, although so far none of them have wanted to do that.
So far, I feel like all my rules are working well. It doesn't seem like any one family is dominating the neighborhood, and I don't feel like I have too many households to play yet.
Given the fact that TS2 was built directly over TS1, TS1 probably has a population limit of 1000, which was the maximum amount of Sims you could have in a neighborhood in TS2 base game (and University too, while Nightlife expanded the limit to 32k).