Incredible Shrinking Houses: Is the Era of McMansions Over?

Eureka Springs, Ark. -- Melissa Greene once lived in a big Victorian, the sort of place with sacrosanct parlors used mainly to display stiff-backed chairs. For the past five years she has lived more contentedly, she says, in a modest 1,100-square-foot home.

She and her husband, Joe, own even smaller houses that they rent to tourists in this arts-rich Ozarks town. This spring, the couple is moving full-time into one of those itty-bitty abodes, a restored 1880s worker's cottage less than half the size of a tennis court. Joe hammered away at a back deck on a recent afternoon.

"I've always liked them," Ms. Greene says of use-it-all living spaces with dollhouse dimensions that send realtors scrambling for optimistic adjectives. "I even lived in 650 square feet of a bed and breakfast that I had," she says, "though it took a year to learn how."

The Greenes embody a nascent small-house renaissance that has crept from renovations into new construction.

Even in this era of foreclosures and wallet-draining utility bills, plenty of suburban subdivisions still sprout 4,000-sq.-ft. McMansions. But between 2005 -- when the average floor area in a new home hit a peak of 2,434 sq. ft. -- and 2006, US architects reported less demand for increases in the square footage and volume of homes, says Scott Frank, a spokesman for the American Institute of Architects. He cites "a reversal of the decades of expanding home sizes."

Some of that can be attributed to empty-nest demographics, to property-tax hikes, and to new pockets of communitarian thinking. Some of it is simply style.

"'Cottage' is the biggest word in decorating right now," says Greene. And if many smaller homes take on the proportions advocated most prominently by Sarah Susanka, author of The Not So Big House -- think half a McMansion or less -- some now borrow from the blueprints of the truly tiny.

Next month, building-supplies giant Lowe's aims to go national with plans and kits for the frame-built "Katrina cottage" developed by Marianne Cusato in the wake of that hurricane as an alternative to government-issue trailers. Options range from 550 to 940 square feet.

"What we've noticed is that as we're building a few down there, the number of phone calls to [our] stores increases threefold," says Jennifer Wilson, a Lowe's spokeswoman. Lowe's declines to release numbers, but Ms. Wilson says requests for $2 plan books have come from every state and "probably almost every continent but Antarctica."

Ms. Cusato, too, was surprised that her design would provoke such interest. "A lot of people instantly came to us and said, 'Wow, it's perfect. I've got an elderly parent,'" she says. "[We had] people saying 'I want to downsize, I don't want a huge house,' [and] people looking for affordable housing. Then there's the vacation side of it."

Some see Cusato's success as a sign of broadening acceptance of small homes.

"Jay Shafer [of Tumbleweed Tiny House Co.] may be the famous one for being at an extreme -- under 80 square feet –--so he gets on Oprah," says David Harned, a tiny-house devotee who runs the genre-celebrating website tinyhouses.net from his 1,200-square foot home in Kalamazoo, Mich. "[But] I think Ms. Cusato is the first to reach a broad audience with a genuinely small design that won't create a generation of claustrophobes."

Mr. Harned sees the pull of tiny houses as being as strong as that of tiny, efficient cars -- an attraction that's intellectually appealing but that can represent a major life change. Full-time use often calls for support systems -- communities with shared common spaces. The current "green building" trend and architects like Ross Chapin -- who favors a dozen or so small homes arrayed around garden space -- have boosted the number of small alternatives