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For New Yorkers who gripe about their cramped living quarters, and there are many, the real estate news announced by the city on Monday should be worthy of note.

Confronted with what the city has in mind, such malcontents may feel thankful for what they have.

Mayor Michael R. Bloomberg announced a city-sponsored competition to design an apartment building full of “micro-units” with 275 to 300 square feet of living space. Each would include a kitchen and a bathroom, but no closet.

City officials said they hoped the building would become a prototype for a new model of tiny, but affordable, housing.

“Young people from around the country or around the world — those are our future, and they don’t have a lot of money,” Mr. Bloomberg said at a news conference, standing in front of a life-size mock-up of a shoebox-shape studio complete with pullout bed, toilet, bowl of fruit and umbrella stand, all made of paper. “You have to change the rules along with the requirements.”

There are about 1.8 million one-person or two-person households in the city, but only one million studios and one-bedroom apartments, the mayor’s office said. The mismatch reflects how the city’s housing has failed to keep up with the shift in its demographics in recent decades.

Mr. Bloomberg himself spent his first 10 years in New York in a studio that, according to his estimate, had 600 square feet; his rent was $120 to $140 a month. (He now resides in a 7,500-square-foot Beaux-Arts town house on East 79th Street.)

The city will waive zoning regulations for the project and allow units smaller than the current minimum size of 450 square feet. Among other criteria, the submissions will be judged on designs for common spaces in the building and on their success in drawing air and light into the units. Submissions are due by Sept. 14.

Some New Yorkers, already squeezed into tiny spaces, might find it hard to believe that homes can actually shrink further.

But interest in making small homes livable, even beautiful, has grown as more people find that tiny is often the only affordable option, said Mimi Zeiger, who has written two books about small living spaces and who recently left a 400-square-foot studio in Clinton Hill, Brooklyn.

The influx of young workers into cities like New York over recent decades parallels a similar flood in the 1920s and 1930s, when bachelor’s apartments and single-room occupancy buildings became popular, Ms. Zeiger said. But some choose small homes out of a desire to live more simply and efficiently, rather than just out of necessity, she said.

Scott McCulley, who has lived in a 338-square-foot studio on East 69th Street since 2003, insists that everything, from decorating to entertaining, is best done in a small space.

His dining table doubles as a desk; his platform bed provides storage. He has forced himself to pare down his possessions. He rarely buys food in bulk, and sometimes uses his stove for extra storage.

“It’s not the amount of space you have, it’s how functional it is,” Mr. McCulley said.

Architects at Jordan Parnass Digital Architecture in Brooklyn, who have worked on several studio renovations, said they emphasize multifunctional spaces and furniture that can adapt to different needs. For an East Village studio that was featured in a number apartment-design blogs, the firm built a loft with a bed and a walk-in closet, with extra storage space inside wooden stair risers.

The firm often receives calls from people hoping to redo their tiny studios, said Darrick Borowski, the firm’s creative director.

“I know they’re out there; I know they’re struggling with this,” Mr. Borowski said. “But there’s a higher awareness now that you don’t have to suffer through it. You don’t have to move to the suburbs.”

For the record, Mr. Borowski occupies a 750-square-foot apartment — with his two children.