With rapid urbanization and shrinking living spaces, compact furniture design has become critical for enhancing the quality of life. This study uses thematic analysis of interviews with 11 users, 7 designers, and 5 manufacturers in Shijiazhuang, China. We identify key mechanisms of space-saving driven by multifunctional furniture (MFF): functional consolidation, temporal adaptability, and context-specific vertical utilization. These findings are contextualized within theories of spatial syntax, emotional design, and the Value-Attitude-Motivation (VAM) model, highlighting how furniture design mediates the relationship between physical environments and social behavior in local contexts. The study concludes with a conceptual framework to guide user-centered design in compact living, emphasizing the role of furniture as a social-psychological mediator.