Chris Bledsoe is of the contrarian opinion that most New York City apartments are too large. His company, Ollie, rents studios on East 27th Street in Manhattan that range from 260-360 square feet in size, well below the city’s housing code standard of at least 400 square feet. Take a tour of Carmel Place, and each unit looks like a furnished dining room, bedroom or living room – but rarely like all three of those spaces at the same time.

By providing multipurpose furnishings and high-end amenities like housekeeping and grocery shopping services, Bledsoe believes he has cracked the code on sustainable urban housing. Inside the apartments, the desk converts into a dinner table; the bed folds into a wall, leaving a couch in its place; clothing racks accordion out from the closets to make for tighter storage capacity.

Ollie’s advertising boasts that its micro-units help reduce carbon emissions by housing twice as many residents as would fit in a traditional apartment tower. “By the very nature of what they are, small space living units are inherently greener than the alternative,” Bledsoe says.

Residential buildings account for 22% of all carbon emissions in the US, according to a 2010 Energy Department study. “Most of those emissions are coming from the energy required to heat, cool, and light the home,” Bledsoe says. “Part of our philosophy is ‘space is waste’.”

Creating sustainable living quarters presents a big challenge for urban planners as the number and size of cities are projected to grow worldwide. In 2016, 54.5% of the global population lived in cities of at least half a million people, according to the United Nations, which expects the rate to climb to 60% by 2030. For cities with at least 1 million inhabitants, the UN forecasts an increase of 1.7 billion people by 2030.

Apartment construction in the US also hit a ten-year high in 2016, while the average size of each unit has shrunk by 7% since 2009. While there’s no reliable data on micro-housing, some notable policies and projects are popping up on that front too. Former New York City mayor Michael Bloomberg waived the city’s zoning standards to allow micro-apartments.

Ollie now services two buildings in New York. The company is also building similar projects in Pittsburgh, Los Angeles and New Jersey, and has another 50 in exploratory phases in San Diego, Seattle, San Francisco, Oakland, Denver, Chicago, Washington DC, Boston and Miami – some of which already have “dorm style” living facilities catering to millennials.

But is more density really the key to sustainable urban living?

“From the point of view of reducing environmental impact, micro-housing has obvious benefits,” says John Quale, a sustainability expert at the University of New Mexico. “Any time you can get people into smaller housing units, it reduces the energy use of the building.

In addition, Carmel Place units were built using modular construction – in other words, boxes built in a factory. The time needed to construct this type of building is substantially shorter than building on-site, which, as Quale points out, translates to significantly less commuting time for employees constructing the units, and therefore a substantial reduction in carbon emissions related to worker transportation.

But other experts say overcrowded cities hardly feel sustainable if lodgings are dehumanizing, or if residents lack access to literal green spaces.

“In Tokyo, your hotel room may be a very tiny box that you sleep in,” says Tom Morgan, an analyst at the environmental engineering consulting firm Arcadis. “That takes density to another level, but that doesn’t feel like a very socially sustainable solution. Our definition of a sustainable city looks at economic, social and environmental aspects. The most sustainable cities come up with a balance of all three.”

As good as micro-apartments may be for the environment, critics warn that packing ever more people into smaller housing units presents a mental health quandary. Research shows that claustrophobic living spaces can cause psychological problems, such as increased stress and an inability to concentrate. The New York City zoning law which mandates apartments need to be at least 400 square feet was waived for Carmel Place in 2012, in part because the company’s design scheme was thought to make up the diminutive floor plans, which include high ceilings, balconies and large windows that Bledsoe says provide sufficient light and air.

Inside Ollie apartments, the desk converts into a dinner table and clothing racks accordion out from the closets to make for tighter storage capacity. Photograph: Ollie

In theory, Ollie spares transient young professionals from purchasing furniture they may discard when their careers take them to new locales. The company also helps eliminate packaging and transport waste by providing services that refill hygiene receptacles while tenants are out.

But micro-units’ ability to ease New York City’s affordable housing crisis is still subject to debate. While 55 units, or 40% of Carmel Place, are designated affordable housing, the remaining studios come at a relatively high starting price of $2,540 per month. A New York Post article in June pointed out that on a price-per-square-foot basis, these are among the steepest rates in the city.

But Bledsoe dismisses that calculation since it doesn’t factor in the costs of dual-purpose furnishings and luxury amenities.

The degree to which Ollie can temper urban sprawl will likely define its legacy as a sustainable homebuilder. But experts note that the type of tenants or owners that micro-units attract is a factor as well. “If the apartments are encouraging a second home by professionals that can afford those rates, that is not a sustainable solution,” Morgan says.

Bledsoe says that out of Carmel Place’s 55 residents, only one or two are using the space as a crash pad. “And when used that way, it’s often by empty-nesters [parents whose children have moved out] who are using it as a step toward urbanization. They have been living in the suburbs and haven’t determined yet that urban living is totally for them. This is a way for them to test drive it, and if they decide they like it, they’ll make the decision to downsize altogether.”

If true, this will likely inspire more micro-units to pop up, with beds that fold from walls and dining tables that run the width of tiny apartments.