This study assessed the Socioeconomic Impacts of Multi-Community Collaboration Approach to Urban Development in Ayobo Town CDAs, Alimosho LGA, Lagos State, Nigeria. Many reasons have been given as to what bring about Multi-Community Collaboration Approach. One of the reasons is that, it has been observed that government cannot solve the problem of our community alone despite the growing number of government efforts and strategies to develop both urban and rural areas in the country yet, communities are being confronted with socio-economic problems. The non-conducive living condition prevalent within various communities in Ayobo as a result of inadequate of social amenities, problem of erosion, pollution lack of proper planning etc. has become a cause for concern. Therefore, to solve these problems, there is a need to develop a comprehensive strategy by using a multi-community collaboration approach that will bring communities together in order to plan and solve their problems together. As suggested by (Gigler, 1999:1) Multi-Community Collaborative actions frequently emerge from the need to address the problems of the communities through joint efforts. To achieve this, the study reviewed the concept of the Multi-Community Collaboration Approach to urban development and its problems and prospects in Ayobo Town CDAs. In Ayobo urban area which is the study area, there are 3 principal communities namely, Megida, Ijan and Igbo-Ilogbo. These (3) three communities in Urban area of Ayobo had contributed immensely through Multi-Community Collaboration Approach to the development of Ayobo as urban area. Through the use of both primary and secondary data collections from relevant sources and literatures, the study revealed that financial constrain, poor membership participation-collaboration among others are the major problems of Multi-Community Collaboration Approach. The problems were properly itemized, analyzed and possible solutions were suggested through the Multi-Community Collaboration Approach concept.