Urbanization in Karachi is driven by numerous factors be it is search for a better life, quality education, access to healthcare services, employment, social security, and the natural growth of population. This has contributed to the rise of housing demand in Karachi, notwithstanding, increased the cost of housing in the city. The rising cost of housing has forced the middle and lower-middle-class to migrate to the suburbs of the city; this paved the way for the formation and expansion of Katchi Abadis in Karachi. Katchi Abadis in Karachi are formed exploiting the wide-spreading housing backlog, state and non-state actors collaborate and systematically grab land in perry-urban areas of Karachi and convert into an informal settlement, developing a sustainable source of income. This study was conducted in Karachi, Sindh and employed qualitative research methodology to assess the formation, expansion and flourishing of Katchi Abadis and how Government of Sindh have responded to Katchi Abadis in term of policy. The study found a formation and expansion of Katchi Abadis take place exploiting the institutional inefficiency of Government of Sindh, making Katchi Abadis a sustainable source of income. The study revealed that policy response to Katchi Abadis in Karachi has been symbolic, Sindh Katchi Abadi Authority (SKAA) is empowered to tackle issues faced by Katchi Abadis but its rigid working style, red tape strategies, inefficient staff, and lack of political will have affected the process. Sindh Special Development Board (SSDB) with a provision to change the status of residential areas into commercial posing a serious threat of eviction to slum dwellers of Karachi, it also ignores the environmental and ecological consideration and sidelining the efficacy of civil infrastructure and basic amenities. The policy response to housing demand lack cohesion at the federal and provincial level, a few policy initiatives are in place to tackle housing backlog but the absence of mainstreaming of policy is likely to lead to absolute failure. Multiple housing schemes are under development, Katchi Abadis are likely to increase exponentially and more people will be living in underdeveloped areas. To respond to such policy issues, it is important to understand how these forms and to expand, thus, the study is an attempt to understand present arran Supervisor:- Dr. Iftikhar Ahmad