As a child, this is how these options played out for me in real life.
Option one. First couple of years after my parents split. Have some very happy memories of this. No overnights, but over couple of nights a wel and one weekend day. He also came over to mum’s sometimes to look after me when she was out, was able to pick me up from school sometimes if she was late, could see him at short notice, that kind of thing.
Option 2. Collapsed pretty quickly. Out of sight, out of my life. Our life’s were in separate places and we detached. He was lonely in a new place and he started actively seeking a new relationship/family setting.
Very quickly option 2 became option 3. Dad moves in with new girlfriend and her kids. New girlfriend quickly insists dad has no time just with me it has to be as a new “family” so she and her kids don’t miss out on his free time. Cue bitter custody battle, even though it’s pretty obvious new girlfriend doesn’t want me to be resident with her.
Then it became option 4. Dad disappears from my life.
If he’s keen to be involved in his kid’s lives and the accommodation challenges are genuine, you will find a way to make it work if you both don’t get caught up in rules and entitlements and responsibilities. If you push him away to the middle of nowhere where he is lonely you are just increasing the chances he finds a new family to fill up that space and that loneliness.
If he’s genuinely not keen on time with his kids and the unsuitable accommodation thing is just an excuse, it’s not going to be 50/50 custody or fair share of parenting anyway. Atleast if he’s local your kids might bump into him or know they can go see him if they need to. As such he might not function as a parent, but as some kind of supportive/involved adult in their lives. More like an uncle or an older brother or a cousin. A lot better than nothing.