The upgrading of informal settlements in cities of the developing world has been touted as a viable means of enhancing both the quality and quantity of the urban housing stock, particularly for poor households. However, the actual performance of most upgrading initiatives has traditionally suffered from top-down planning frameworks, excessive bureaucracy and political interference, poor coordination among concerned actors, as well as inadequate community involvement in project design and implementation. This study analyses an innovative approach to settlement upgrading premised on collaborative spatial planning and the community land trust (CLT) tenure model, as implemented in Voi Town, Kenya. The project design and implementation featured strong elements of co-production bringing together actors drawn from the state and market sectors, as well as civil society institutions and the local community. While the findings underscore the utility of co-production in urban housing provision, a number of pitfalls likely to derail community agency and project sustainability are pointed out as a way of improving future initiatives premised on similar models.