Each of our dogs have their own area to relax, eat and sleep.  They have a large field beside the kennels for taking their run when they are not working.  Border Collies need to live "outdoors" if they are expected to herd sheep in inclement weather.  If kept in a hot house they would not have a proper coat and would catch cold when they ran outside while herding livestock.  It is necessary however to provide a "dog-house" of a suitable size for the dog with a good lining of straw to help wick away any moisture.  Too large is just a bad as too small.  Also rugs used in a dog house will retain moisture that thaws with the dogs body heat and will make the dog house wet inside.