Animal shelter design profoundly affects the welfare of housed animals, with evidence-based principles transforming shelter management over the past two decades. Traditional cage-based kennels cause significant stress in dogs through noise, visual stimulation, and social isolation; stress indicators peak after 3-5 days of housing. Shelter dog welfare improvements include: double-sided kennels allowing choice of indoor/outdoor space; soundproofing to reduce noise levels; structured enrichment and play programmes; and foster care networks reducing shelter stays. Cat welfare in shelters is severely compromised by traditional cage housing; communal cat rooms and free-roaming adoption areas dramatically reduce stress indicators and improve adoption rates. Building design factors including lighting (natural light cycles), airflow, and acoustic management are increasingly incorporated into shelter construction standards. Shelter welfare assessment tools (ASPCA SAFER, UC Davis Cat Care Protocol) enable systematic welfare monitoring. The shelter-to-rescue pipeline and community cat management reduce shelter intake, improving welfare outcomes system-wide.