Neighbourhood begins with housing. The first requirement is to meet the fundamental human need for shelter. Along with housing there is need for education, yards, playgrounds, and recreation centres for leisure time activities, churches and temples for religious observance, health facilities, grocer and other retail shops.

Neighbourhoods have many economic characteristics of ‘little economies’. Buildings are rented out and sold. Housing market and other community facilities, informal economic transactions, lending and borrowing take place in the neighbourhood.

Many neighbourhoods have companies and small-scale industries producing goods, services and employment.  For example, almost all neighbourhoods in Calcutta will have a local sweet-shop.