Living space and floor space have little to do with each other. Living space is floor space with a certain height (for most areas 6'11" and in ours 6'7") and requires emergency egress. That is, a way to get out if bad things like fire or earthquakes happen. We added a door to the basement design to facilitate egress, but the height issue caused problems in two of our four spaces in the basement: the playroom and the guest room. Because they aren't high enough (6'4"), they cannot be considered living space and therefore cannot be approved as such. Which is good, sort of, because stairs leading into "living space" need to be minimum 34" wide, which none of our Uncle Louie Special stairs are.
The playroom in question is the downstairs part of the Uncle Louie Special. It was designed and approved as "storage space" back in 1976 because taxes at the time were determined on ceiling height (ie. anything over 6'7" was taxed). So it has a low ceiling and narrow stairs.
The guest room caused issues because the previous owners had taken part of the required indoor parking space to build a room (by two feet). They also built a strangely high sub-floor.
Neither of these rooms can be approved as "living space" so they are now well-appointed "storage space" thanks to whiteout. We just happen to store a big-screen tv, surround sound, and couches in one and a guest bed in the other.
Result: one of four issues solved.
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