With my first two, we were also tight on space and never used a crib. My mom bought me this Eddie Bauer playpen that was a lot heavier than normal playpens, but about the same size, and it had this very cushioned padded bottom that had a nice fabric that could be easily cleaned. It was really dark blue, I've never seen one like it again. We used that for both the kids beds for the first 2 years. With my third child, I finally broke down and got him a crib that somehow magically fit into our bedroom thanks to this window alcove, but not until he was nine months old.
Cribs are overrated. Just do whatever works best for your family.
Four children. Just welcomed our newest member on 2/12!