Today,more than at any time before, there are many,many choices for studio flash equipment suitable for use in small spaces. I wrote a blog post on it a few months back
Derrel's Photography Blog: Low-Cost Studio Lighting Options
One thing to keep in mind in small spaces and with today's high-ISO cameras, many of which only go down to ISO 200 with full dynamic range: high-power flash units are NOT as needed as they used to be, or as they are when working in large,spacious studios. Also, the need for light control in smaller spaces is more important than in larger spaces: honeycomb grids, diffusers, flags, scrims, and especially grids or "egg crates" for softboxes are truly helpful in controlling light output,distribution,and spill light, especially in small spaces and low-ceilinged places like apartments, basements, garages,etc. 150 to 200 watt-second monolights are ample in power with today's ISO 200 to 400 d-slr capabilities, esp. in small spaces.
For example, in small spaces, a softbox equipped with BOTH a recessed face AND a grid is a very,very useful tool, compared with an old-school softbox with a flush face and no grid. Same thing with umbrellas; top-quality enclosed umbrellas like the Photek Softlighter (Annie Liebovitz's favorite tool lately) control ambient spill light, while shoot-through umbrellas make a mess of things, especially when you have more powerful lights, or low ceilings. Shoot-through lights are fine for Strobist use, but for professional work with "big" flash units, reflecting umbrellas give much more control and less unwanted ambient spill light.