I know a bunch of people who live on boats that are on average 400 sq ft. Some more some less. They are perfectly happy and love their lifestyle.
I lived on a boat for 4 years. Yes, indeed, I loved it. But you have to sort of double the square footage since you have the entire deck and the staterooms and cabins below deck. In addition, you have a significant amount of dock-space and ‘lake-front’ property, so-to-speak. All of which makes your effective living space feel much more expansive.
They chose their lifestyle. I suspect these homes will be imposed by urban central planners.