This young family lives in Portland Oregon on a half lot, their home is very small by most standards, preferring to build UP instead of spreading around. They took a 407 square foot-print, made it 3 levels, they combine some living areas and omitted others.
I like their bathroom, especially the combination sink/toilet, while that may sound bad to some, in reality, the water you would use to wash your hands after using the toilet, pours directly into tank to flush the toilet. They did this to have the room for their Japanese soaking tub.
I will say that things will need to change (or expand) for them when their daughter grows up a bit, of course that could be said for most young families.
Watch the video and enjoy :)