In recent years, I've had to design spaces too small for the traditional sofa arrangement. These rooms are the greatest challenge because they often go hand in hand with a low budget.

Good ideas can be drawn from the Scandinavians. Their houses began to shrink before ours did, and they have devoted time and talent to making the most of what's left. We can learn from their use of small-scale furniture, cozy groupings and neutral colors.

I've seen a room dominated by a stair, for example, and all the space could accommodate was a loveseat and one small easy chair. Covering the loveseat in off-white canvas to match the walls, and using wall-to-wall floor covering of sisal for the floor and up the stairs, made the whole room grow in proportions with this neutral but sophisticated scheme.

In another tiny home, designing a small living room was further complicated by a pair of doors leading to a small, flagstone patio. Since the patio was in frequent use, a traffic lane from the entrance to outside had to be preserved.

This meant making the seating group compact but cozy. The couple had invested in four arm chairs designed by the great Finnish architect, Alvar Aalto. The chairs were in molded beechwood with black canvas seats and backs; complete with adjustable head-pillows, they are small in scale but comfortable.

I groups the four chairs easily around a large coffee table, its glass top resting on a cube base of the same beechwood. The bare, natural wood floors, sanded and waxed, are reflected in the same wood used on the ceiling and in the unfinished shutters I used to cover the glass doors to the outside for privacy within.

The seating group is augmented by beech stacking arm chairs, brought from the adjacent dining area, when there are extra guests.

To warm up this spare space, I covered thin plywood panels, 4-foot-by-8-foot, with natural linen. The off-white color of the line blends happily with the beechwood and black and all four walls are covered with the panels. To accent the panels, I painted the walls above and between them in charcoal, leaving an inch at the top and between each panel. I repeated this linear accent in the charcoal baseboard.

Regularly spaced wall-washers recessed into the ceiling adds drama and warmth to the texture of the panels. Large plants in terracotta pots, baskets and floor lamps combine to give this tiny room a warm and elegant air.