I know that my horses were kept in stalls with runout paddocks. I had access to a two acre "pasture" that was really more of a sand and scrub lot, but they were only out in it maybe a couple of hours a week. That said, they were both ridden anywhere from one to five hours a day, five to six days a week--usually to a sweat. They worked. I think if you were to be able to give them sufficient daily exercise, it'd be fine. My little mare is moving to be with me on my new property, and when we move, she'll have a stall and a fifty by fifty paddock to roam. No pasture (good, because she is fat on air, and I'll be able to watch her weight better). However, I'll be riding her almost daily, through woods and up inclines, so I anticipate few problems. Horses can adapt to most circumstances, provided their humans minimize the negatives.