The Tumbleweed Tiny House company makes this 89-square-feet Epu model.

(Courtesy: Tumbleweed Houses)

The market for small living spaces is expanding.

"San Francisco and New York City have plans to build experimental 'micro apartments,' and a small tiny-house community has popped up on the outskirts of Washington, D.C.," according to Business Insider.

At first, the idea of cramming all your possessions into less than 200-square-feet may be horrifying. At the same time, the idea of minimalist living is attracting more and more interested buyers.

Design is the key to making small spaces livable. How do they do it? Click here to see what it's like to live in an 89-square-foot home.

(MORE:More Americans are Moving Again)