"I do not live in the lararium."
Translation:Ego in larario non habito.
Use 'in' + the ablative case to describe the situation of being in or living in something as opposed to 'in' plus the accusative, which describes movement into it. The ablative describes a static situation, the accusative describes a dynamic situation involving movement into.
Vivo is fine for habito (vivere rather than habitare). See examples in Lewis & Short, II.B., p. 2002. Even in Cicero vivere could refer to "to dwell." Not important but reported. Admittedly, Spanish interference probably influenced my choice of vivo. Nonetheless, the distinction DL makes regarding the primary sense of habitare as 'dwell' vs vivere 'to live' (in the sense of 'to be alive') makes sense.