The paper argues that understanding the ways in which criminals interact with state and non-state actors is crucial to construct a more accurate picture of how local governance arrangements are unfolding in urban policy-making in Latin America. Based on the experience of Medellin, Colombia, it is discussed that alongside decades of violence, rapid urbanisation and economic liberal reforms, the local state has built capacity for service provision and new governance arrangements. But this capacity has not weakened criminal actors’ operations and interactions with society and state actors. By focusing on the neighbourhood level, the paper demonstrates the existence of different strategies that have allowed criminals to benefit from governance arrangements, originally created to promote participatory democracy and urban development. The paper calls for studies to incorporate the role of criminals in contexts where boundaries between illegal and legal spheres of action, and formal and informal arrangements are continuously blurred.