1. A method of allocating memory in a storage system that comprises a memory controller and a set of memory devices, the set of memory devices comprising a plurality of memory portions, the method comprising: at the memory controller: determining a current memory allocation for the set of memory devices, wherein the set of memory devices is formatted with a ratio of first storage density designated portions to second storage density designated portions in accordance with the current memory allocation; detecting satisfaction of one or more memory reallocation trigger conditions; and in response to detecting satisfaction of one or more memory reallocation trigger conditions: modifying the ratio of the first storage density designated portions to the second storage density designated portions in the set of memory devices to generate a second memory allocation for the set of memory devices; determining a revised storage capacity for the set of memory devices; and reporting, to a host system, the revised storage capacity of the set of memory devices, wherein the host system is coupled to the storage system for sending read and write host commands to the storage system.