Modern Balinese families who live in government low-cost housing in Denpasar are confronted with the challenge of fitting domestic life into the physical shelter. They must cope with physical, spatial, and socio-cultural issues which encourage them to continually adjust the house in response to changing needs in a self-motivated process. Housing adjustment leads to change and improvement in domestic spaces. Change itself is an inevitable process within any socio-cultural context. Maintaining both old respected cultural aspects and adopting new values are essential in this housing adjustment process. For the Balinese, a house is not simply a shelter to accommodate habitation activities, but a house is also a ritual site. They use most parts of the house to perform ritual ceremonies. On the one hand the dweller should conserve the cultural values, but on the other, the house has limited space. It forces them to compromise with regard to the following: 1) ritual and habitation activities; 2) sacred and profane spaces, and 3) distance and proximity (circulation). These compromises have to be determined within the requirements of family life and economic resources. The paper describes the interplay between intangible aspects and the use of space within the house.