The informal sector in South African urban environments has been a subject of increasing interest due to its significant role in economic growth and social integration. A mixed-methods approach was employed, combining qualitative interviews with quantitative analysis of government data and legal documents to understand the complex interplay between law and practice in the informal economy. The research identified a notable trend where urban local authorities were increasingly adopting more formalized policies aimed at regulating the informal sector, but these efforts often faced significant resistance from community members who relied on informal activities for livelihoods. While there is growing recognition of the importance of supporting informal workers within legal frameworks, achieving sustainable integration requires a nuanced approach that balances regulation with social support and economic empowerment. Local governments should develop targeted interventions to assist informal sector members in transitioning into formal economic activities while ensuring their basic needs are met through social safety nets.