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Housing size is a key variable in determining the environmental footprint of residential buildings. Besides the environmental aspect, housing size is the result of residential decisions made by households, which are influenced by the interplay of factors on an individual level and of the surrounding social structure. Therefore, considering residential preferences is crucial in efforts towards housing sustainability, however, research has so far hardly combined the two perspectives. We have employed an interdisciplinary approach by investigating into the relations between housing size and the environmental impact of dwellings based on literature and consequently analysing the potential of a reduction of housing size by considering households’ willingness to move to smaller dwellings if they were to shrink in size. The quantitative analysis of a survey with tenants from Switzerland revealed that 40% of the respondents would not be willing to move and 25% would be willing to move, suggesting that a reduction in household size was not widely considered a trigger for moving. We found not being willing to move related to the attachment to the current dwelling and its location which can overshadow financial benefits from moving to a smaller dwelling, especially for the more affluent households. This effect is enhanced by the difficulty of finding a satisfactory and cheaper dwelling on the rental market. To overcome such constraints, we suggest systematic incentives and facilitation of downsizing moves, together with ensuring a supply of adequate dwellings meeting diverse needs and providing high quality of living while using resources efficiently.