I certainly understand the need to have a young inquisitive dog kenneled while you are away and also not having the space upstairs to place a larger kennel in which Coco will be comfortable. A kennel in the basement could serve that need. I also understand that Coco should feel his kennel is a place of refuge and comfort and in that respect sleeping there at night would reinforce this.

On the other hand, it has been my experience that a properly housebroken dog will not nececessarily need to be kenneled overnight. It would be an interesting question to poll others, but none of my dogs have ever slept in a kennel after a couple months. Right now I have medium dogs but when I was first married I had an airedale and a lab. They both slept in the bedroom with us (no kennel) as do my current two. I don't suppose I can advocate you allowing Coco to sleep on the bed which I'm sure would be his preference.