Thanks everyone for your responses! These are very helpful. We have been thinking through our options for moving various bathrooms or taking over the mechanical space. Unfortunately, there seems to be challenges with most of the ideas we've had. These two floors are all the space we have - no basement or cellar. We're in a historic district in Washington DC, so any additions would be a heavy lift. We have thought about selling and moving, but we would need to renovate the kitchen and bathrooms before we sold since they are all pretty out of date. The fact that we have a two and a half bathrooms is fairly rare for a house this size in this neighborhood, but since they were one of the main selling points of the house for us, it would be tough to give any of them up. On relocating the half bath downstairs, my wife likes the fact that it now opens into a hallway and not directly into the living/dining space. This limits where we can move the bathroom, The closet underneath the stairs would need to be expanded to hold the half bath, the full height section is too narrow and not long enough to meet code. Also, the kitchen/bathroom hallway wall parallel to the stairs is load bearing. We'd probably be able to put in a column and beam, but that's a factor that will likely drive up the cost of opening up the downstairs. We have thought about relocating the washer and dryer upstairs into the small step-in closet with the chimney that buehl mentioned. There is space for a 24in washer/dryer in the back of the closet, but keeping access to it would waste the rest of the closet space. We hadn't thought about reworking that space with the other closet and hall bathroom. Thanks for the suggestion! I'll think though how we could get it to work. I'd love to hear your ideas. If we relocated the washer dryer, we could move the doorway into the mechanical room to the main area from the kitchen. That would give us the ability to add more counter space in the existing kitchen space. The wall where the refrigerator is too narrow for the 36in fridge. We would either need to close the doorway into the mechanical room or widen the doorway into the hallway. Venting for the hood will be a challenge from the current kitchen. Our options are to run the vent pipe up through the bedroom above or out the back using the space between the floors - there is about 2 feet of space between the ceiling joists downstairs and the floor joists above. going out the front is a no go in the historic district. But before I give up the plan to move the kitchen into the living space, let me ask, what do you think about the one wall kitchen idea? Is 14.5 feet too little to make a usable kitchen? Is there a way to design it so that it doesn't feel like it takes over the rest of the space? By the way, the sewer line goes back through the rear of the house, so at least we have that on our side.

Thanks Patricia for taking the time to read my post! I agree with the built-in banquette seating. My finance is pretty convinced that it's a great idea for big family dinners (which is funny since most meals we eat out OR eat in front of the TV since we live in a condo and it's only the 3 of us). As for the pictures, I took these with a wide angle lens, which unfortunately distorts the edges of the pictures (ie like a fisheye lens, but less severe). I took them like this to fit more of the room into a single snap shot. While the drawing isn't 100% to scale, it, for the most part it shows the correct scaling of the walls, nooks and crannies. We're mostly hoping to have general furniture layout suggestions to keep the room looking not awkward, with clean sight lines from walking up the stairs, out the patio and from the kitchen (far screen left in the diagram; it's cut off, but will be a full kitchen that has a pony-wall overlooking the stairs).

So here are the dimensions specifically pulled from my manual for our soon to arrive counter depth fridge. It specifically shows the side panels for the "built in look" should be 25" deep. That takes into account the 23 7/8" deep fridge plus 1" min airspace clearance. The IKEA panels come in 25" deep (90" long) and 36" deep (96" long) options. I'll likely need to go with the 96" long panel to completely fill in the sides floor to ceiling. The manual is not clear about how far the doors will open with 25" deep panels. Does anyone have personal experience that can confirm how far your doors open with 25" side panels? Direct from the manual: When installing refrigerator adjacent to wall, cabinet or other appliance that extends beyond front edge of unit, 20" minimum clearance recommended to allow for optimum 120° to 180° door swing, providing complete drawer / crisper access and removal. (Absolute 4-1/2" minimum clearance will ONLY allow for 90° door swing which will provide drawer / crisper access with restricted removal.)

This is a close up of a tweedy type rug that might work for you - I just think a darker rug will cozy up the area and complement the ottoman so much better.... This rug has been discontinued and the remaining sizes are probably too big for your space, but it might be a direction to be looking, if it appeals to you: Something like this might work, too. I can't tell for sure about the colors but Pottery Barn has samples available in store if there is one near you, refundable deposit when returned: