Due to rapid growth of cities, especially in developing countries (DCs), cities face social problems for humans and the environment (UNHABITAT 2003). Moreover, Indonesian archipelago of 81.000 km coastal-line is inhabited by more than 25% of the population with majority being low income earners (Dahuri et al, 2001). Settlements in coastal areas also have a physical problem related to corrosive and natural hazards (ADB 2003; UNHABITAT 2003). Low income housing has a multi-dimensional meaning and significance. A house is not just shelter but also a place to accommodate all of the households’ activities, including business activities needed to gain family income. Home Based Enterprises (HBEs) support many low income household in developing countries in order to increase household income. In coastal settlements especially, these activities are conducted in improper house condition without standards of space for business activities. Moreover, this condition has worsened because of the lack of infrastructure, services, physical facilities and clean water. In order to improve the quality of human life in the coastal cities, some local governments of Indonesia have decided to resettle or redevelop those settlements. Meanwhile many cases show that resettlements or redevelopment in several communities fail to meet the households’ requirements. These is caused by the applied building systems using unsustainable materials and disregard for the geographical coastal context which do not meet households’ requirements. This study investigated a set of issues about the space designs of low income housing in coastal area. The research focused on the households’ requirements for functionality and adaptability especially to support business activities of residents at home. Although several studies on coastal housing problems have been conducted widely, investigation on sustainability of the building is still limited in terms of household requirements related to changes in the needs of household (Kobayashi, 2000; Marfa’i, M.A, 2008).