The inadequate provision of welfare services has long represented a persisting issue in addressing urban poverty, especially in districts where poverty converges. One such district, once a day laborer's quarter, is Kotobuki of Yokohama. However, given that Kotobuki is now recognized as a welfare center, this study analyzes why the abovementioned transformation occurred. Previous research examining this question focused especially on the role of civil society, neglecting that of the city government, despite its crucial role in providing welfare services. Furthermore, few studies have employed robust theories in their analysis. Against this background, this study aims to bridge these gaps, conducting in-depth interviews with city government officials and civil society personnel while using public choice and neo-Hegelian theories. The findings provide useful implications for policymakers in day laborers’ quarters worldwide, as well as insight into future welfare strategies, informing the development of public policies to address urban poverty.