"I walk by your house."
Translation:Eu passo pela sua casa.
Sounds really strange, like "I walk around your house". The verb "passar" (to pass by) is preferable here.
Couldn't that also include driving past? If we wanted to be specific that we were walking how would we say that?
Eu caminho pela sua casa sounds really like "I walk through your house", "I walk around in your house".
Why is pela acceptable here but not por? When is the contraction obligatory and not?
It's not. Unless you mean without the "eu." I think in Portuguese, like in English, you need the pronoun. In Spanish, you don't. However, I'm not 100 percent sure. Maybe someone who natively speaks Portuguese could answer that question . . . ?