The concept of the “urban village” originated in the Western context, where it referred to planned neighborhoods designed to accommodate growing urban populations. In contrast, in South Asian cities such as Delhi, urban villages emerged as a consequence of large-scale land acquisitions during the early 20th century, driven by the pressures of urban expansion. These villages, once rural settlements on the city’s periphery, were gradually engulfed by the expanding urban fabric. Despite undergoing substantial transformation, many urban villages continue to retain cultural and traditional elements of rural life, even as they strive to adapt to the rapid pace of urbanization. This paper explores the transformation and commodification of traditional homesteads in Shahpur Jat into rental accommodations serving both commercial and residential needs, particularly following the influx of designer boutiques and associated businesses. Drawing primarily on data from a detailed primary survey, the study reveals that while this shift toward a rent-based economy has provided an important alternative income source for local residents, it has also introduced significant socio-economic challenges. The unregulated and profit-driven nature of this development raises critical concerns regarding structural safety, social security, and the long-term sustainability of the village economy. These findings underline the urgent need for a more sustainable and equitable approach to managing urban villages, emphasizing the responsible use of resources and the mitigation of the adverse impacts of urbanization.