Ok, I live in what I thought was the smallest apartment out there. 168 sq feet (no kids). I love it. I can't see ever living in a large house again.
It is in a "strip" of apartments. The town it is in became a hugely popular vacation spot in the 1920s. It has several old motels, most of which have been converted to apartments. It has no insulation, and I can hear my neighbors' phone conversations clearly through the paper-thin walls. Winter is ok, the heater heats it up fine, but I about died in the summer, it was probably 20 degrees hotter inside, even with all the windows open. Cooking is out of the question in the summer. And I have to bring my dogs to my mom's house when I go to work, because it was a condition of them letting me move in with them. Took some convincing to get them to accept the dogs (my kids!).
Well my friend has a studio apartment attached to her garage, and her renter just moved out.
It is a great location, closer to work, better neighborhood, no attached neighbors, access to a yard, and I can leave my dogs at home when I go to work. It has better insulation, and an air conditioner even (I have one, just no ac-friendly windows in current place).
When I first went to see it, to make sure I wanted to move in, it didn't look too small. I went back today, and wow. Hmm... Ok, it's small.
It will work, because I want it to, but it is tiny!
(it's ugly too - white walls, black cupboard doors and trim, pink mini blinds)
Oh, well, so I buy paint and curtains