Urbanization in Ethiopia is rapidly transforming its cities, including informal settlements where a significant portion of the population resides. Theoretical analysis will be employed to explore the interplay between urban development policies, community resilience strategies, and service delivery mechanisms. This theoretical framework identifies critical gaps in social welfare services that require targeted interventions to improve the quality of life for residents. Policy makers should prioritise equitable urban planning, with a focus on enhancing service accessibility and community participation in settlement development projects.