Since he moved to his new place in Boerum Hill, Daniel Kanter has had the same vivid dream every two weeks. He finds himself in the weird twisting hallway outside his apartment (aka "the intestine"), when he opens a door and suddenly discovers—holy cow!—a whole new room. It's in rough shape, but the space is amazing, and it's huge. There's even an extra closet.

Mr. Kanter, who shares his cramped, real-life one-bedroom with his partner and two dogs, says that as he surveys his dream room, he gets more and more excited contemplating the possibilities. It could serve as a fabulous workshop, or—just imagine—a storage space. Sometimes, in the dream, he will start painting the walls, or moving furniture from his old rooms to the new room. "It's always disappointing to wake up," he says.

Robert Neubecker

Forget playing Carnegie Hall or pitching for the Yankees: Discovering an extra room in your apartment may be the quintessential New York dream. Local brokers and therapists hear about it from clients all the time. "It's very common," says Anne Cutler, a Union Square psychoanalyst who runs a weekly dream interpretation group. In the typical scenario, she says, the dreamer walks through a previously hidden door and finds a new room that's sunny and bright. "They tend to be excited," she says.

In my version, I discover an entire wing of a mansion, complete with a grand ballroom the size of a Wal-Mart. Others enjoy more modest discoveries. I know folks who repeatedly dream of second bedrooms. A Brooklyn Heights friend discovers a plantation-style verandah, complete with rocking chairs worthy of Mark Twain.

It's hardly a surprising phenomenon, given that most New Yorkers inhabit spaces that folks in, say, Houston might consider a good start on a closet. The average New York City home is just 1,200 square feet—half the national average, and the smallest of any big city.

In the waking state, we tend to rationalize this state of affairs. Living in a shoebox is no problem when you've got Central Park for a backyard, the Statue of Liberty as the world's largest knickknack and your choice of 160 Starbucks SBUX +0.59% Starbucks Corp. U.S.: Nasdaq $74.70 +0.43 +0.59% March 17, 2014 11:44 am Volume (Delayed 15m) : 1.66M P/E Ratio 479.43 Market Cap $56.14 Billion Dividend Yield 1.39% Rev. per Employee $84,242.9 03/14/14 Starbucks to End Exclusivity D... 03/07/14 What Your CEO Is Reading: Buil... 03/03/14 Brazil Carnival, Weather Push ... More quote details and news » to use as your personal bathroom.

Then there's the well-known fact that our tiny homes keep us slim. Over the last 40 years, as the mean U.S. home size nearly doubled to 2,400 square feet, the average American has responded like a goldfish in a big tank, gaining 25 pounds. Here in New York, our spaces stay trim, and so do we.

But the unconscious mind tells the truth: We crave space. We want to roam free in our homes, eating wildly in one room, doing laundry in another and making love in a third. Trouble is, we can't afford it. In Manhattan, the cost of an extra room (the difference between a one- and two-bedroom apartment) is currently $605,000, or $1,200 a month if you're renting. No wonder the id produces recurring nocturnal fantasies about guest bedrooms.

The phenomenon is hardly limited to New Yorkers, of course. But in other lands, it takes a different form. Michelle Weissman, a Corcoran agent who hears about the extra room dream from her Manhattan clients, says her clients back in L.A. also reported the dream, but with a twist: "Usually it was a guest house. Or a pool house."

And New Yorkers may be more susceptible. According to standard dream interpretation, the home represents the conscious self, says Ms. Cutler, the psychoanalyst. Because New Yorkers live in tiny spaces, "It's a more obvious day-to-day metaphor for the unconscious to call on."

In fact, some report that upon moving to a bigger space, the dream departs. A friend who lived for a decade in a cramped one-bedroom off Times Square says she used to discover a warren of 20 rooms elaborately decorated in a Moroccan theme. Upon moving this summer to a huge two-bedroom in Tampa, the dream stopped. "They only have two dreams here," she says. "Joining the best yacht club or joining the best country club."

So what does the dream mean? According to Jung, a man who was right about everything, dreams are the mind's attempt to bring unconscious knowledge to one's conscious attention through metaphor and symbol. If the home represents the known self, the discovery of a new room means one is uncovering new aspects of the self. "It's new potential within which you can live consciously," says Max McDowell, an Upper West Side Jungian analyst. "It's a positive dream."

That's great, but I don't need more psychological potential; I need a combination music studio/guest bedroom/backyard with a dog run.

Has there ever been a New Yorker who discovered a real-life hidden room? Sort of. The blog Scouting NY documents the case of an investor who found an entire, hidden two-lane bowling alley in the basement of a building in Ridgewood, Queens. No word on whether it was turned into a guest bedroom.

And last year, siblings selling their parents' 10-bedroom apartment on the Upper East Side found a walk-in storage space that had been hidden for decades behind a fabric hanging in the master bedroom. "It was like this pristine, hermetically sealed closet," says Jennifer Bowden, the Stribling agent selling the apartment. While it was the bedroom's fourth closet, it was still an exciting discovery: "In New York," says Ms. Bowden, "storage space is far too valuable even for those with $10 million apartments to be cavalier about."

—Contact Ms. Kadet at