My kids faced the same situation, though at least the neighbors also had kids. I think that parents have to revolt en masse against saturating their kids with extracurriculars. One family going it alone is going to have lonesome kids.
The competitiveness has to go away -- the feeling that your kids have to be 100% occupied in order to give them a fighting chance in the future.
The problem there is college. You'd have to either make college admissions much less "holistic", or make sure there are non-college paths to success (something people have been trying hard for many years with little success), or both.
Or just go to a state school. My alma mater apparently has an 87% acceptance rate. My extracurriculars were playing Counter Strike, Battlefield 2, and WoWcrack. It doesn't seem to have had any negative effect on my life.
This has to be some segment of the middle-class and especially newly-upper-middle-by-income-but-not-socialization running into this trouble. Parents “under” that set just send their kids to [name of state] State where OK test scores and grades do the job. That’s a large majority of parents of college-bound kids, right there.
Parents “above” that set let the legacy admissions advantage and golfs-with-Ivy-admissions-officers prep school counselor sort it out.
Kids seriously looking to get into highly-selective schools are a minority.
This does mean you’re opting your kids out of elite schools by not playing that game from an early age, but hey, you and everybody (the colloquial “everybody”—most folks) else.
What I observed in my neighborhood is that the school playgrounds which used to be unfenced were essentially secondary parks. But they have since been “locked down”, removing more places kids once could just go to hang out in our paved over subrbia. I also had the benefit of an undeveloped forest behind my house to go explore and play in, but I don’t think most kids these days have access to that without an adult driving them to such a location. Walkability to nature is a big plus.
The competitiveness has to go away -- the feeling that your kids have to be 100% occupied in order to give them a fighting chance in the future.
Schools need to back off on homework.