'Out place is so small that you have to go outside to change your mind," says Steve Ficher, who with his friend Kerna Bardes, rents a three-rom, 18th-century log cabin in suburban Maryland.

There is a certain charm to living in a tiny house, but such quaintness can wear thin before long. Nevertheless, living in smaller spaces is becoming a necessary challegen now that high mortgage interest rates and inflation are keeping many from moving into larger quarters. The result is an explosion of products and ideas designed to address limited square footage.

Those who don't have enough cabinet space for pots hang them on "high-tech" wire mesh racks or on wooden slats (remember those Masonite peg boards usually relegated to the wood shop in the basement? -- they're making a comeback in the kitchen). Without space for a guest room? Buy a convertible sofa or chair. If that takes up too much space, buy a Japanese futon or, better yet, invest in a classy air mattress. A Murphy bed will fit inside a nice wide closet.

Space-saving gimmicks, of course, cannot solve design problems. But some architects, like Mark McInturff, of Wiebenson Associates, enjoy the challenge of coping with small spaces. For the past two years, McInturff, his wife Cathy and partner Jeff Hannon, an attorney, have been re-ordering small spaces in a once-condemned, four-room house in a remote corner of Bethesda, just off MacArthur Boulevard.

With $25,000 and a lot of patience, the three negotiated for nine months with 32 heirs to purchase four tiny shacks on a slope parallel to MacArthur Boulevard. Perched on a clearing overlooking the C&O Canal and the Potomac River, the largest house -- still being rebuilt -- has four rooms though it originally had six extremely small separate spaces. The smallest -- a project left for later -- has one. The trio began by removing the phony brick asphalt siding on the 40-year-old house and discovered good quality wooden siding beneath it.

The floor plan of the original structure was simple: a central staircase immediately inside the front door leading to two bedrooms and a bath, and a room on either side of the stairs on the first floor. Across the back, a narrow kitchen and another small room had been added.

"We decided to retain the basic floor plan and emphasize what little classic, although slightly cheesy, overtones the house had," McInturff said. The front of the house is deceptively plain: Only a peculiar-looking vertical wall peeping up from atop the roof on the back side of the house gives a hint of what faces the river. The back of the house is an explosion of windows and angles creating a permanent link between the house and the trees and the surrounding hills.

"I decided that with a space this small, you need to provide a focal point, so I decided to make a real event out of going up the stairs," McInturff said. It is the treatment of the stairway that gives this doll house an expansive feeling. The architect retained the original staircase, a door-width away from the entrance. To the right is the living room, to the left the dining room. The ceilings reveal the joists supporting the floor and classic doric columns serve as dividers between the two rooms and the sunny two-story kitchen and extended bay window seat.

A casual glance up the stairs is breathtaking. At the top is a huge circle defining the view out into the trees. To explode the space without sacrificing living area in the house. McIntuff made a two-story-high addition in place of the original one-story addition and popped up a dormer in the peaked roof the full width of the house.

Upstairs the landing in front of the large window separates a bath and small bedroom on one side from the master bedroom on the other. The smaller room has a built-in loft bed for partner Jeff Hannon. One window pierces the wall where Hannon rests his head while the other has a view through the transom to the river and hills behind the house. The loft is crowded into the peaked roof so there is enough space beneath the bed for other furniture and for an adult to stand. From the master bedroom, windows have been carved out of the peak in the roof. The view from one window is partially obscured by the stainless steel stack of a woodburning that heats much of the house. "I'd rather have a partial view than none at all," McInturff said.

Small houses demand squeezing the most sense of space out of what's available. Architect Robert Bell, who has remodeled a number of houses on Washington's Walter Street SE, was faced with the problem of rearranging space in a townhouse.

Again, four basic rooms had to be reoganized around a single dramatic area, in this case a narrow (5 1/2' by 7 1/2') two-story space that serves as well of light. To make the room overlooking this space more efficient, Bell added an alcove just large enough for a bed and repeated the architectural motif he used to frame the space in open windows overlooking the back of the house. The owners use the space as a tiny office and the bedroom for the larger pieces of furniture. Such choices make the difference between tiny spaces being cramped or comfortable. CAPTION: Pictures 1 and 2, Architect Mark McInturff peers down from the dramatic architectural event that brings a sense of spaciousness to his four-room frame house. The tin columns rising from the basement are return air ducts which also link the two floors visually. The rear of the house has a contemporary "widow's walk" offering a glimpse of the C&O Canal and the river. An exploded view of the back of the house shows the classic columns that define spaces and the circular window.; Illustration, no caption; Picture 3, The wall system by Interlubke offers a room full of furniture in a single wall -- storage and even a bed. A bookcase on a pivot turns to reveal a Murphy-style bed. Available through architects and designers, the system can be purchased in sections. The four bays pictured here cost about $6,200.; Picture 4, the Plona table by Castelli neatly folds into quarters so that one can use half a table or a whole table by simply adjusting the swing support underneath. Made of polypropylene, the table comes in a 33-inch-square version of the round 37-inch-diameter model shown here. It can be folded up into a 28-inch-high, 8-inch-wide, free-standing piece. Available through Ginns for $378.; Picture 5, Arched windowless windows look down on a two-story space in this tiny house on Walter Street SE. Architect Robert Bell created the small but dramatic space that can be seen fro this bed-sized alcove, which does a great deal to relieve the closed-in feelings that comes from living in such close quarters.; Picture 6, a reproduction bill collector's desk by Harden measures only 12 inches in depth when closed but holds lots of papers. Unlike most secretary-styled desks, the table legs and lack of cabinet work below give the piece an airiness that provides a clever solution for small spaces. Available in pine, only through W. & J. Sloane's for about $1,700.; Picture 7, This is an improved version of a gate-leg table the Scandinavians came up with years ago. The table, available at many budget furniture stores, runs around $120 to $130 and seats four. A New York distributor recently introduced an impressive variation of this classic space-saver -- a fold-out table with storage for four chairs inside! The entire set runs around $300 and is availalbe at Hecht's.; Picture 8, The ultimate in space-saving kitchen gadgetry is the CuisineVu, a countertop, space-age microfiche viewer ($325). The machine comes with nine free cookbooks and more are available. About 100 books can be crammed into the 4-by-6-inch box. At the Kitchen Bazaar. Photograph by Robert A. Bell