The Australian housing industry has been built on a multitude of unsustainable practices, contributing to Australia having one of the largest ecological footprints per capita worldwide. Australia’s single dwellings are the largest in the world, with an average floor area of 214.10 square meters. Apartment building may be on the rise but the latest figures by the ABS show, the average new home built in Australia is still ten per cent bigger than its counterpart in the United States and nine per cent bigger than in New Zealand. In contrast, recent statistics highlight that the average number of people per household has declined by almost 30 per cent over the last 50 years, with an average of only 2.6 people per household in 2012. This developer driven residential building market, typically built for the nuclear family unit, is unsustainable on multiple levels. They comprise of large low-density properties across huge amounts of land, filled up to their roofs with excess goods. A changing demographic and a change in social structures are prompting the need to rethink the Australian housing market. In addition, climate changes will continue to affect the built structures of cities, suburbs and communities, significantly altering our environments over time, which will directly impact on how we live. Although smaller living or downsizing with its environmental and economic benefits is not a new concept, it failed to make a significant impact on our urban fabric. This paper explores the concept of low impact living. It will argue that we will not be able to sustain our current way of dwelling but need to downsize space and upsize the quality of life simultaneously. This paper will discuss a project explored by design students at Griffith University on integrating smaller living into the existing urban housing stock to offer a better range of housing options.