What can you do with $725? Modern Micro-lofts...Design solution to affordable housing?

In the city of congestion, small is big. Much emphasis is placeed on energy efficiency, affordable housing, urban densification and adaptvie re-use, teeny slick designs as live-work space...Microlofts design are gaining popularity in the West Coast.
I first came across them in Asian cities, and recently L.A., San Francisco, and the new arrival in Vancouver. No more than 200-300sf, about the size of two parking spaces, the adaptable interior includes space for sleeping [murphy bed], living, kitchen and bathroom, micro-lofts are offering affordable rental and ownership solution in the urban centres.
Wouldn't this create a world of possibilities for adaptive re-use of small abandoned buildings? The other question is whether by shrinking the square footage of living space, when the cost for square foot remains the same, is worth the sacrifice for the convenience and amenities of city living? Perhaps more lessons can be learned from the design of small spaces such as ships cabin, mini-homes, ?
The Alexandria, L.A.

Typical Japanese Apartment Floorplan
Japanese Capsule Hotel
Related Articles:
'Micro-lofts' a solution to Vancouver housing woes? by CTV British Columbia
Big city, small condos: 'Micro-lofts' to come to Vancouver Times Colonist