As the urban population in Indonesia is growing, limited availability of land, especially in big cities, causes microgrounded housing phenomenon to emerge. However, the social sustainability aspects of this housing model are little understood. This research seeks to understand the potential social implications on residents who live in micro-grounded housing in Indonesia. The adverse effects of crowding from case studies all around the world are being collected, combined with Maslow’s hierarchy of needs theory and the housing value framework created by McCray and Day, are used to measure the social sustainability of the residents in Surabaya, one of the biggest cities in Indonesia. Combining interviews with empirical observations, this study used two opposite case studies: micro-grounded housing and standard-sized vertical housing, as a comparison to understand the distinct characteristic of the former. This study found that micro-grounded housing caters to fewer human needs and therefore only satisfies the lower part of Maslow’s hierarchy. When the basic daily need has not been fully satisfied, the urge to higher needs of housing value such as social interaction, prestige, and beauty, does not occur as this research found. A recommendation is made for more strict enforcement of space standards, for both building and plot size. Additionally, another form of housing such as co-living model could be an alternative to provide social sustainability through provision of more communal facilities. Moreover, the housing strategies need to focus not only on increasing the quantity of the house but also on its quality to reach a higher level of social sustainability.