The main focus of this publication is on understanding the emerging relationship between state, market and social classes in the city of Colombo in the context of emerging housing market and citizen's access to livable houses in the city and its suburbs. The people's recent residential patterns or segregation of the area, urban life styles, and class formation due to the new housing communties have received only scant attention. The research findings of this study is a guide in formulating appropriate urban housing policies and the appropriate strategies to cater to the individual housing needs in the future. This is a useful resource to sociologists and other social scientists interested in urban development, politics, planning and to urban planners, city administrators, urban policy makers, builders and bankers.