FOR TOO LONG, the McMansion was the symbol of success in this country, but Americans are finally coming to the conclusion that bigger isn’t better. The average new home size in America peaked at 2,479 square feet in 2007, according to the National Association of Home Builders (NAHB). Since then, the trend has started to reverse. In 2010, real estate research firm Trulia found that the median “ideal home size” for Americans had declined to around 2,100 square feet, and a third of survey respondents reported that their preference was less than 2,000 square feet.

Two thousand square feet is still a more than comfortable amount of space, but there’s a growing interest in going smaller—much smaller. In July 2014, A&E Network will launch a new series called “Tiny House Nation” that will feature small dwellings ranging from micro-apartments in Manhattan to row homes in Savannah, all less than 300 square feet. The new show, along with the many books, blogs and magazine articles, confirms the health of the small-house movement—a return to houses less than 1,000 square feet—that started in the late ‘90s. It gained traction during the Great Recession of 2008, with more homeowners looking for housing that was more affordable, easier to maintain and eco-friendly. Today, Millennials are feeding the trend with their taste for compact urban living, including micro-apartments no larger than a dorm room. And as Baby Boomers retire and downsize, expect even more interest in small.

But small homes don’t have to mean small lifestyles. Whether designing or retrofitting a 1,000-square-foot condo or a 300-square-foot micro-dwelling, the key is to pack in greater functionality, using every available cubic inch. The slideshow below showcases a number of concepts and strategies: built-ins, niches, items (and even entire rooms) that cleverly collapse, hide away or transform into something else altogether. Not only are these ideas practical, they’re fun, and hold the potential to make a small space fee.

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