In Living Small, The CEOS for Cities blog suggests there are four trends driving people to downsize their living arrangements:

the tanking economy, eco-consciousness, millennials who have less money to spend and “want to be in a more social urban environment”, and the urban renaissance.

Downsizing must be in the minds of many citizens wondering how to adjust their greatly exaggerated life style to something more to par with the current economic landscape. Yet, according to Richard Florida in his article about rethinking our needs from the old order, a more profound change is needed, in particular when it comes to expenditures on houses and cars so more money can be diverted to emergent goods and services, likely those that will reconfigure the economy in the future. This reminds me of an architecture trend, a decade old, to create small houses. He then takes the argument one step further, suggesting not only smaller, but more flexible living arrangements are key:

…homeownership also ties people to locations, making it harder for them to move to where work is. Homeownership made sense when most people had one job and lived in the same city for life. But it makes less sense when people change jobs frequently and have to relocate to find new work.

Less ties to a place would create an incentive for people to relocate to the hubs where new opportunities arise. Which cities will become the magnets for the new economy? It is too early to tell, but they will have to be smart about reconfiguring themselves to make it easier for eager global citizens to seize these opportunities. This reconfiguration may start with updating zoning laws to enable high density areas around the industries of the future. People should be able to trade their old super-sized house for a tighter, leaner living space as long as the proper urban rhythm is part of the equation.

In my post slums of hope I suggested that slums (as another form of urban organization) had their own virtues:

the new urban paradigm may very well be based on the high-density of these slums. Places where humanity takes precedence over the material world, where luxury has nothing to do with the riches of the world, but with the knowledge on how to live a good life.

Maybe there is a lesson to be learned from those that have thrived amid almost impossible economic constraints.

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