Budgets aren't what they used to be, houses are smaller, and lifestyles are changing rapidly. Clients today want flexible space, and when climate allows, even the distinctions between indoors and out are dissolving. How to make the most of a narrow lot, how to use every square foot of living space, while also responding to rising ecological concerns, and skyrocketing energy bills - the answer is clearly the small, innovative house, as examples from Chile to Tokyo show.