As Seattle densifies and expensifies, fresh ideas in housing are breaking out. They have to; the traditional single-family city home is looking as endangered as neighborhood drugstores and street parking.

We've seen one solution and it ain’t pretty: the dismal neo-craftsman clusterplexes breaking out like a pox around Stone Avenue and North 85th Street. High-rise condo living, another option, has its attributes, but it's a radical shift away from the intimate neighborhood culture of this city.

An interesting trend, though, may be poking out of the annual AIA Seattle Honor Awards announced last week. Several of the winners are small-scaled residential projects using cramped city lots and innovative combinations of living, working, or income-producing rentals.

Taken together, they suggest that the 20th-century model of compartmentalizing and segregating the various facets of city life is an idea whose time has gone. It's almost a reversion to the urban fabric of the 18th century.

"It's going back to the natural zoning of cities," says Jim Graham of Graham Baba Architects. "The shopkeeper lives over the shop. It brings 24/7 life to the neighborhood. And he doesn't have to commute anywhere by car."

Graham Baba's "Building 115" in Fremont won merely a third-level "commendation" in the AIA award lineup, but it may be the most interesting of all the winning projects.

First, it's an amazing squeeze job. On a 30-by-90-foot lot, Graham has layered a 900-square-foot retail space (currently occupied by a custom bike shop), a rental office space soon to be claimed by a design firm, an office for the owner’s construction business, and 800 square feet of penthouse living for the owner.

Actually, the living space is essentially 2,000 square feet, but most of that is in the form of a wraparound third-story deck, with folding glass NanaWall systems throwing open the living room and bedroom to the outdoors. The lot's industrial zoning limits residential space to an 800-square-foot "caretaker's unit," so the generous deck is a way of satisfying a silly regulation. The deck provides great views of passing traffic on the Ship Canal, though its all-season usefulness is debatable.

The building's street presence (115 36th St. N.) is delightful, especially at night. Most of the facade is composed of vertical strips of Channel Glass, panels 2 inches thick and filled with translucent gel for good thermal insulation. From the outside it becomes a lantern at night; inside, soft northern light suffuses the second-story office with gentle warmth. The window treatment is an assortment of slots, slits, indented nips and outreaching bays. It offers enough sizzle to look busy, as it should on a commercial street, but it doesn't slip into willful Fremont perversity. Good middle-ground judgment.

It's obviously built to an "aggressive" budget, as Graham terms it, with plain concrete block common walls on the sides and raw concrete ceilings inside. In places, frankly, it feels pretty austere; the warmth of the light doesn't entirely cancel the cold of the concrete and steel. But the concept points the way toward innovative small-scale urban development. What could be better than wrapping living, work, and income-producing rentals in one package?

Olson Kundig Architects' Art Stable at 516 Yale Ave. North (a few blocks north of REI's flagship store) is built to a different scale and very different price point. Its six residences, ranging from 1,900 to 4,000 square feet, are being sold at $500 to $800 per square foot — an eyebrow-raising entry fee for a recession. But four have already been sold, so it's apparent that architect Tom Kundig and developer Point32 have something figured out.

This is another tall (seven floors), skinny (42 feet) urban infill project, but the developer made a canny investment in buying air rights to the 20-foot-wide slot between the Art Stable and the larger apartment building on its north flank. Kundig then designed its structural system around beefy interior columns, so that the north wall doesn't have to hold anything up.

Consequently, each buyer can order any kind of window configuration on that wall, in addition to the generous glass on the Yale Avenue side and the double-wide alley in back. That makes for an unusual amount of interior daylighting, and a bit of idiosyncrasy on at least one face of the building.

Well, make that two — no Kundig project bursts into being without some Tomfoolery. The front doors are 14 feet high and painted with oven-baked chartreuse and orange car enamel. An 8-inch pipe rockets vertically up the facade, forming a giant hinge for huge 9-by-9 foot windows on each floor, opened from inside with crank wheel and worm gear. Kundig is a gearhead; he loves architecture with wheels and transmissions. On the alley, a similar arrangement with a crane stationed permanently on the roof is intended to allow furniture and art to arrive and leave through the windows.

Point32 partner Chris Rogers says the building has been marketed as a live-work environment for artists, even though the typical artist might better be able to afford a $700-a-month warehouse loft in Tacoma. Still, he says two of the four buyers so far are working artists.

Probably more significant is that the building is flexible enough to welcome a wide range of future uses if the South Lake Union neighborhood changes again. It could just as easily be offices, gallery space, or retail.

And there's the challenge for architects and developers in a rapidly changing, tightening Seattle: to make buildings that adapt readily to a changing economy and society, and yet exude character and style that says something about Seattle. Usually these objectives nullify each other. These buildings show that they don't have to.