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Of course! Let's say that you are in a family with 4 members and that you own a copy of Portal 2 and a copy of Half-Life. At any time, any one member can play Portal 2 and another can play Half-Life. If two of you would like to play Portal 2 at the same time, someone else in the family will need to purchase a copy of the game. After that purchase, there are two owned copies of Portal 2 across the family and any two members can play at the same time.
In this example, if your family choose to not buy a second copy, you can play any other game in your library while waiting for your family member to finish playing your copy of Portal 2.
As the game owner, you can try making that game private ... wait a couple minutes and the other family member should be kicked off game.