It's all coming together -- energy consciousness, smaller families, inflated home prices with steeper interest rates and the high price of long commutes to work. Together, these elements forecast smaller living spaces for Americans, who have grown accustomed to almost 30 years of expanding living environments. It's not going to be easy, but it appears to be inevitable.

Single-home production is down; townhouse building is up. Unable to trade up to the bigger house of their dreams, owners are improving their current homes -- in 1980 Americans spent an estimated $54 billion on remodeling, more than was spent on new home construction for the same year.

"The trend is toward smaller homes," says Jay Shackford, an official spokesman for the National Association of Home Builders. "People seem willing to live in smaller homes, but they don't want to give up the amenities. They want the air conditioning, the bathrooms, the basements and energy efficiency."

Despite the fact that more and more Americans are living in smaller spaces, they are stuck with what Lewis Mumford called "picturesque" homes that reflect other periods in history and other ways of living. Construction techniques have changed very little over the centuries and our thinking has altered very little as well.

The great architects of this century have not concentrated on housing; instead, their attention has been on forging new approaches for public architecture. The result is that most people live in homes designed to evoke other times -- the Colonial period is clearly at the top of the list in popularity, even when what is called Colonial bears little resemblance to the homes of our forefathers. Most of our homes are not architect-designed but constructed by builders responding to the needs of the marketplace. These builders use techniques of constructing homes and styles of architecture they know best. The result is not a lot of creativity in the average American home.

Frank Lloyd Wright, one of the few outspoken architects on the subject of housing in this century, urged the reduction of separate rooms or "boxes," as he referred to them. He also was conscious of the need to relate the scale of our homes to our own proportions and to the outside -- a fact that many brick boxes seem to ignore. In The Future of Architecture, Wright described the typical home of his day, saying it "consisted of boxed beside or inside other boxes called rooms. All the boxes inside a complicated boxing. Each domestic 'function' ws properly box to box."

Other architects, Phillip Johnson and Mies van der Rohe in particular, took the idea of a single continuous space one step further, but their efforts were somewhat precious -- all glass walls in a home fit only for a wooded estate and a heavily marble-clad home designed by Van der Rohe.

Architects like Van der Rohe and Johnson went on in their careers to make their names by designing major landmark public buildings. Creative thinking in residential architecture has been shunted to the back burner -- confined to architects working on individual homes with individual clients.

Oscar Newman, in a chapter from the book Architecture for People, points out that "young architects are trained to acquire a visual perception which makes them appalled by the endless sprawl of suburban development. They are not taught to be inquisitive enough to learn whether most families living in single-family houses in a suburban tract find their homes the closest image of their affordable idea -- whether their homes satisfy their aspirations and represent in tangible form, what they have worked for all their lives to achieve . . . families that occupy them [the tracts] do not see the overall tract; they see only the glory of their individual homes."

Some architects are beginning to talk to environmental psychologists and sociologists about the way people live and relate to one another, and they have come up with some intriguing insights.

Dr. Sandra Howell, an associate professor at the Massachusetts Institute of Technology's department of architecture, is an environmental psychologist specializing in the reactions of people to their housing. Howell points out that we still don't know at what point our behavior becomes seriously affected by reduced living spaces.

"We do know, for example, that there is an impact when space is so small that a whole family can't sit down and eat together," she says. And while we are challenged to use rooms for different purposes, Howell notes that this fairly obvious solution may contain a number of not so obvious problems.

Howell says that though "we can use rooms in homes for various activities, most of those activities have to take place sequentially, not simultaneously." It isn't that the spaces are so confining but "our contemporary style of living, regardless of income level, includes a lot of acoustically obstrusive equipment -- televisions, radios, stereos -- all making many domestic activities conflict with one another."

It's hard, she says, for a child to do homework in the combined living room/dining room/family room/study if Mom or Dad are watching a ball game on television or an older sibling is listening to deafening rock music. In the short run, the solution is to schedule activities so that there is less conflict.

The long-run solution is probably going to affect the kinds of materials used to build houses. Says Howell, "We may become more interested in the materials used to insulate against sound," for example, and that may have a direct impact on the design of our homes. If we are going to use rooms for a multiplicity of purposes, she cautions, we're going to have to start making the adjustment at an early age.

In the meantime, researchers have found that even though buyers may not fully understand their own needs, they tend to select homes that to a large extent avoid massive problems of adjustment to new quarters.

Anyone who has considered the problems of living in a small space -- as opposed to those who constantly complain about not enough room -- comes to grips with the question of livability. Just what makes a home livable? For many, it is surrounding oneself with familiar objects or cherished possessions. For others, it is a reflection of a desire to recapture the home of their childhood or the one they wished they had as a child. Others want raw space, perhaps because of a latent mild claustrophobia or because of a need to show status by the space with which one surrounds oneself.And then there are those who simply require more physical space for themselves, their families and their possessions, for reasons not entirely clear even to themselves.

Few people consider the way they live when they rent or buy a home. Only after moving in do they begin the process of adapting themselves to their environment or adapting their environment to their needs. For those who muddle through, coping with small spaces means keeping a tight rein on possessions -- throwing out that magazine from six months ago because you realize you're never going to have time to read it, or learning to live in clutter.

The people whose homes are featured in this issue have found solutions to living in small spaces, ways to satisfy a range of needs and still create a comfortable environment for living. The solutions fall into several broad categories: visual trickery, creating illusions of spaciousness; reshaping small spaces to serve contemporary needs; techniques for squirreling away things you can't bear to part with, and furniture that solves small space problems. While solutions vary, they display a universal disregard for convention.

One result is a weekend child's bedroom that doubles during the week as either a sewing room or an ironing room, all in no more space than an old bathroom once occupied, or an attic crawl space converted into a loft office and a cathedral-ceiling bedroom.

Another intriguing solution utilizes escapism, focusing attention on pure whimsy. Thus, space becomes less important than humor in one's environment. Fantasy takes precedence over all other considerations.

Regardless of the solution, the direction is the same. There is a growing recognition that we have to assert ourselves in our living environment.

The trick becomes how to think big in a small space.