The dichotomy between home and work is well delineated in urban, non-agrarian economies. Housing and workspaces in urban areas are designed to reflect the specific functions society defines for them. While a majority of the workforce maintains the socially prescribed separation between home and work, a significant portion of the workforce works from their house. This research looks at the spatial and social impacts of home-based work on the function and design of housing, for low-income households. The two important components of poverty alleviation programs implemented in developing and developed countries by states and international aid organizations are shelter provision and schemes for income-generation. While considerable attention has been paid to the shelter aspects of housing and housing as the site for reproductive activities, less importance has been paid to the economic aspects of housing and to the house as a site for work. This has resulted in the planning of urban neighborhoods that lack the necessary spatial linkages to support income-generating activities, and the design of houses that are inconvenient for multifold functions. This lack of importance given to the house as a site of economic activities is paradoxical, considering that the income provided from work done in the house is the very basis for survival for many households; especially those living near the poverty level. It is also paradoxical, considering that many of the microenterprise loans provided by states and international aid organizations, as part of their schemes for income generation, are for entrepreneurial activities carried out in the house. Data for this paper comes from in-depth interviews and ethnographies of low-income women engaged in home-based, wage earning and entrepreneurial activities to generate income in Hyderabad, India. Given that low-income households have limited spatial resources, the findings show that the manifold uses for space within home-based workers’ houses result in the creative usage of space. Home-based workers resort to temporal and spatial segregation of household and work activities to increase efficiency and create a psychological separation to maintain a dichotomy between living and working. The size of the house and household and the characteristics of work such as, the size of the operation, income generated, number of employees, among others, have an impact on the utilization of space within the house. The spatial characteristics of the house, such as its location within the urban area and neighborhood, and its linkages to public infrastructure and civic amenities impact the characteristics of home-based work and the usage of the house for income generation. The analysis also shows that power and entitlement issues at the household and the community levels influence the ability of women to use the house as a site for economic activities. The paper discusses how findings from this research can broaden policymakers’ knowledge of the manifold functions of housing, especially among low-income households and to plan for housing to meet the diverse needs of households.