The inner urban redevelopment of Sydney is evidencing a regulatory vacuum which may result in declining quality of life for settlers in new developments and a rapid deterioration in the urban fabric of the city. Based on research on the Sydney inner city redevelopment of Pyrmont Ultimo this paper investigates the experience of settlers in new medium density developments. Pyrmont Ultimo is an exemplar of urban consolidation and compact city policies transforming the settlement patterns and urban form of Australia’s capital cities. The redevelopment has paralleled that of other brown field industrial water fronts in the post-Fordist economy. Rapid population growth in the area has been fuelled by changed housing expectations, economic restructuring and demographic shifts. The paper reviews the impact of private public relationships on development and some preliminary outcomes for settlers in relation to their expectations of the area, the management and governance of new development and the quality of life in medium and high density developments. The paper argues that the macro program of deregulation has devolved management down to UDCs and individual developments resulting in conflicts of interest and a regulatory vacuum in relation to quality of life in new medium density developments.