Before Microsoft, Starbucks, and Amazon transformed Seattle into the 13th-largest metropolitan area in the nation, this was a grubby, rain-soaked port town of frontiersmen, loggers, and fishmongers.

Seattle's humble past is still apparent in the Central District, a sleepy neighborhood where couches slouch on empty porches and house colors range in shades of purple and black. It's here, in the weedy backyard of a furrowed early-1900s Craftsman, that David and Jodi Sarti's bright-red house sticks out like a sore thumb trying to hitch a ride to the 21st century.

"I kind of fell into this place, this area," Sarti says with a laugh, rolling out a retractable dining-room table from a kitchen cabinet of his compact 1,100-square-foot home and studio. He gently slides the table back into place and walks to the wall-wide glass doors that look over the 16-by-17-foot courtyard of his backyard. "I couldn't afford to buy a house so I figured I'd have to build the place myself."

Though the challenges of hand-building his first house on a small lot with a very modest budget are patent, the 35-year-old Sarti took it all in stride. After all, he's done this kind of thing before. For the past five years Sarti has worked as a project designer with Environmental Works/Community Design Center, a nonprofit architectural firm that builds projects for the low-income community and other nonprofit groups whose needs traditionally outweigh their resources. "Once I started the house, I realized how much my job had prepared me," Sarti admits. "Limited budget, limited space, density issues—I've dealt with all those things before."

Sarti's idea for a tiny abode of his own first blossomed in March 2001, when a property owner approached Environmental Works about developing the unused backyard of a rental property. After reviewing the building process, the owner realized he didn't want to get into the construction business. "That's when a light went on in my head," Sarti explains. Two months later, he bought the 40-by-50-foot half-lot for $35,000.

He spent the next year and a half sketching concepts. "I just tinkered around but couldn't decide on anything. I knew the house would be small, but I didn't want it to feel small, so there were a lot of challenges." Then, during a lunchtime stroll, Sarti was struck by the L-shaped space of a downtown art gallery and everything clicked. "I'm not sure if it was irritation at my indecision or inspiration, but I knew then that's what I had to do."

Taking a leave from work to begin construction, Sarti enlisted the help of friends, including former coworker Brian Neville, now of Van Zandt Design Build, who led Sarti through all of the framing, cladding, roofing, and window and sheetrock installation. Larger jobs, like laying the foundation, plumbing, and electrical, were subcontracted out.

Because of the restraints on time and budget, Sarti was limited to common, inexpensive materials that were readily available at the local lumberyard. "None of the materials were planned out, so I had to improvise a lot,"Sarti explains. "You know, when you're doing construction you can't afford to sit around and wait for inspiration to come. It's like, when your hair is on fire, you find the closest thing around to put it out-that was my building philosophy."

Seven months later, the house was completed for a total cost, including land, of under $250,000.

A few miles from downtown Seattle, Sarti's house sits off Yesler Way, a dog-eared urban boulevard once used as a "skid road" (from whence we get the name Skid Row) on which logs were skidded downhill toward a lumber mill. "I like the color, the funkiness of the neighborhood," Sarti explains. "Plus, it's close enough to downtown that I can ride my bike to work."

Down the side-yard driveway, the house (literally) glistens in the rain. Sarti used cement board to clad the entire structure. Painted red and buffered from the walls of the house with a complex flashing system, the boards give the house a geometrical depth, as well as shielding it from the seemingly constant rain. The sliding doors of the attached workshop are white polycarbonate sheeting, a translucent material that allows light to filter in during the daytime and out at night to give the house a glowing appearance.

Just off the living room, the kitchen area is home to some of Sarti's more playful inventions. Here, a telescoping dining room table pulls out from a kitchen cabinet to various lengths, depending on the number of guests. He and friend Prentis Hale built all the cabinets, counters, and interior wood paneling out of inexpensive ACX plywood. Because of limited space, Sarti invented a mobile kitchen-supply box/cocktail station/breakfast bar that burrows in the cubbyhole beneath the stairs and holds cookbooks, cutlery, and spirits. On casters, this unit brings the party to the people.

Above the kitchen, Sarti placed the water heater and mechanical utilities usually found on the floor level in a kind of elevated storage room. Built from the same plywood used throughout the kitchen, the room saves space downstairs and also creates the L-shaped architectural detail that first inspired him during the design process.

The clever placement and re-articulation of common materials make the house seem not only bigger but posher. This is apparent in the modish, exposed-porcelain industrial sconces that pop from the ceiling on the second floor. An indulgence, certainly. "Nah," Sarti scoffs. "Those are the cheapest lights you can get—five bucks, including the bulb."

Back downstairs and across the courtyard, construction workers are putting the finishing touches on a complex of neo-Craftsman style apartments. Sarti watches them from below the bright green awning and red walls of his little porch. "There's no real architectural tradition here. To me, that's inspiring. Anything can happen; it's an open slate," he muses, seeing the glass half-full. "And right now, this whole city seems ripe for more interesting, smarter solutions."