This study presents an adaptive, inclusive, and sustainable framework for the design protection and development of Bajo community living spaces in Indonesian waters, inspired by the Funaya model in Japan. The framework was developed using the Regulatory Impact Assessment (RIA) method, integrating the principles of rights, restrictions, and responsibilities (RRRs) to address challenges in coastal management, cultural preservation, and economic sustainability. Key strategies include design protection based on zonation and space, the application of RRRs principles, and adaptation of the Funaya model. This approach emphasizes participatory governance, legal certainty, and community empowerment through training and incentives. The Funaya adaptation integrates the preservation of traditional houses and tourism development to enhance cultural and economic resilience. While its implementation requires significant resources, the expected benefits include environmental sustainability, cultural preservation, and improved livelihoods for the Bajo people. This framework serves as a replicable model for integrated coastal management across Indonesia.