The emergence of squatters in the urban centres of Malaysia especially Kuala Lumpur, is part and parcel of the effects of urbanisation. Attempts to rehouse the squatters by the government have been undertaken through low-cost housing programmes which have not been very successful. This is because of implementation problems faced by the government and also the misperceptions about the suitable housing type for the planned people since housing is what it offers to people rather than what it is and how it looks. So the provision of decent housing and environment for the people is a challenge to modern society. The introduction of Community Development as a process is seen to be a practical middle course of action which is suitable to the attitudes, values and quality of present day squatters. The success of this process depends absolutely on the total commitment on the part of the government in providing the essential resources and a complete participation by the squatters themselves in utilizing these resources. Thus, a non-directive approach is felt as a necessary, yet sufficient method to be adopted where contributions from external forces such as a planner and government representative are only needed in rendering expert advice and financial support. With regards to this proposal there is no intention of producing a new lay-out plan for the area because of the strong community response from the squatters and the proposals that come out immediately from them should be materialised.