Why do you think that there are more germs in the laundry room than in other areas of the house?
I have worked in biochemistry labs, so I know quite a bit about microbiology. The dangers of germs are widely overrated and it is NOT healthy to keep everything sterile. A healthy immune system can and needs to deal with bacteria all the time.
If you keep soiled diapers in your laundry area, than it wouldn't be the ideal room for kids to play in. Another problem may be the use of chlorine bleach which is pretty toxic. You shouldn't have the kids in the room while you run a bleach cycle. Make sure your kids can't reach the detergents and additives and that they don't mess with the appliances.
I don't see any other problems with a double duty room.

I have a personal dislike of a laundry/mud room pairing since it's a not a nice way to enter the house, even for the inhabitants.

My own laundry rooms are split between one for washing and one for drying, ironing and folding (on a different floor, no less). The Washing machine area shares space with my flower arranging area. Both need water service, and can tolerate the cool darkness of my basement. Also in that room is a large amount of shelves where I keep my backstock of household cleaning supplies. And the sink the laundry and flowers share is also my big utility sink for the household. That's not totally ideal, and I'm thinking of reconfigurng that so I have a separate utility sink and a deeper laundry soaking tub.

Upstairs, I have my drying room, which is where clothes exit the house to got out on the lines and return for further attention: ironing, folding sorting into baskets for delivery around the house, etc. It is also set up as a mending room with sewing machine at the ready for quick repairs. (I have a more elaborate seamstress' room that doubles as my linen storage room on the second floor.) It may seem at little odd to separate the washers and dryers (by now I'm used to readers incredulity about this), but it makes sense for me since I wanted to separate the soiled end of the laundry processing, from the dry and clean end. And all my laundry goes out to dry on lines, anyway. I really like having a dedicated arrival area for the clean laundry as it comes in en route to storage. Often it needs a bit more airing to become cupboard dry, or ironing and then hanging. In my household we have a system of small placards that hang on the door to the laundry room from the main hall. The placards advise each person that they have laundry that needs to be carried off and put away. I will happily sort, wash, hang, bring in and iron, but I'm not very good about putting away, so that's where I draw the line. The drill here is: It's your laundry, deal with it!

In your case, I think it might be a good match to have a children's playroom space in the laundry room. Perhaps at some point after they are grown up it will convert to a sewing room for you. Meanwhile as you process the laundry they are right there being supervised.

HTH,

Molly

I am firmly in the camp that believes having things too sterile is actually bad for your immune system. My great aunt, who lived to be 101 and a half, could eat things out of the refrigerator that none of us young people would touch. Her resistance to bacteria was good and built up over time and exposure. All that to say that if you are not phobic about what lurks in your laundry room, then having it serve mutliple purposes can be fabulous. If you, like several of my friends, constantly use hand sanitizer and try to eradicate every lurking germ, then you are not likely to be happy with having other activities happen next to where you wash soiled clothes.

We recently did a renovation and decided to turning an old garage apartment into a multi-function space. It includes a laundry area, mudroom, pantry, office nook, and a small bathroom. The mudroom's French doors are where a garage door was 50 years ago and now open onto a smallish front porch that connects to our driveway. The mudroom is modest in scale. The doors let in lots of light. It has a little stool for the kids to sit down to take off their shoes, a low shelf for storage, several pegs for school bags, coats, and my cloth shopping bags, a small table for important papers the kids bring home, and a small tower with basket that hold sunglasses, a brush, pony tail holders, mittens, hats, etc. A large pantry opens at one end and the kitchen is up two steps at the other.

From there a wide hallway opens into the laundry area in the middle section. The washer and dryer are front loaders and mount under a long counter with a deep sink at one end. There are cabinets above the laundry area that hold detergent, stain stick, vases, cleaning supplies, unmatched socks, tools we use often, seeds, etc. Eventually I hope to add a wall mounted drying rack to a space I left blank. I have had my eye on one in the Ballard Design catalog, but cannot yet spend the $$, The ironing board is mounted into the opposite wall and has a lamp, an intergrated plug, hook for hanging a couple of items, and a place to store the iron, hot or cold. The whole set up works beautifully for sorting, folding,and ironing laundry. Seems everyone is willing to help with the laundry now, because it is a pleasant place to be and well laid out.

We have deep shelves built into a sort of wall cubbie. There we store two large laundry baskets on each shelf. Dirty clothes are on the bottom shelf, clean on the next. We also use the other cubbies for beach towels, pool bags, my "gift closet" and clothes that need to be donated or mended go on upper shelves, as they are culled during washing. My children never want to get rid of anything, so I have to sneak these out of their sight.

I use the laundry sink for flower arranging, cleaning out coolers after a trip, and sometimes as a place to store wet dishcloths and dust rags (on a little rack that fits inside the sink) so they don't stink up the rest of the laundry until it is time to wash a whole load.

The countertop serves mutliple purposes too. When clean laundry is put away it becomes a place for weighing food for our monthly co-op splits, drying art works, starting seeds in trays, polishing silver, etc.

Instead of a powder room, we located a small, but full bathroom directly across from the laundry work space. Though we often set up a drying rack in the large shower, especially in winter, it is great this time of year to come in from the garden or back from the city pool and be able to take off dirty or wet clothes, hop in the shower, and throw stuff in the wash without tracking through multiple rooms.

Towards the back of the house, still open to the laundry area, I have a built in desk with large triple windows over my work space. My computer, filing cabinets, and office supplies are there and it overlooks the prettiest part of our back yard. When I finally finsih cleaning out my boxes of files, we will be able to get to the door that leads out to the terrace. Other than the kitchen where I spent most of my time and even with boxed, it is still a nice space.

If I had it to do over again, there would only be two changes I would want to make. First, I might make it a little bigger, as the children always want to be here with me and I would love to have a work space for them too. Second, I would add a bar for hanging up clean clothes until we take them upstair. I asked the cabinet contractor to do this as part of his work, but it didn't happen. I have since decided I would prefer the drying rack for now anwyway, but if I had more room, I would add a small closet or hanging bar.

Happy deciding! Perhaps I can post some photos soon.

Germs wouldn't be my concern in a multi-purpose laundry room, but ventilation would. In fact, in my next house, I plan to install a exhaust fan in the laundry room. If you're able to adequately control humidity and the space is comfortable, then craft area could be fine. Having a big sink nearby for clean-up would be a plus.

In many homes (including almost all in Europe), the laundry is in the kitchen. If there was a germ problem, you'd think you would hear something about it. I don't know of a single soul who has gotten sick or died from laundry being washed in appliances located in the kitchen.

Good grief! Why are we so paranoid about germs lurking in our laundry, bedding, cutting boards, heating ducts, etc., etc., etc.? Most germs found around a house never hurt a flea.

Just my two cents.

jamesk,
not almost all homes in Europe have the laundry area in the kitchen. I know a lot of apartments have them in the kitchen, but a lot of one-family homes, duplexes and so on have it in the basement.
You are absolutely right, however, concluding that there is no problems with germs from dirty laundry. It is totally unnecessary to worry yourself crazy about household germs. Some of the more dangerous germs can actually come from contaminated food. People should be a little careful about handling raw eggs, meat, seafood and so on. A cutting board can contain a lot more dangerous germs than dirty laundry.
The nice thing about sanitary cycles is not the need to kill the germs for heath reasons...but to get rid of musty or other nasty smells and some common allergens.