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Most of the cities and urban centres of developing nations, Tanzania inclusive are faced with increased urbanization coupled with informal land development in non-designated areas including marginal and hazardous lands. This paper reports the findings of a study undertaken to assess the processes of land development and the associated impacts in Msasani Bonde la Mpunga, a, flood prone area in the City of Dar es Salaam. Based on official and household survey, non-participant observation and documentary review, the study identified that the processes of changing the use of the land and developing the area were in contrary to the existing regulations including the Urban Planning Act, 2007 as well as the National Environmental Act of 2004. This has resulted into multitude of impacts including formation of temporary ponds surround the houses, physical inaccessibility of the area, prevalence of water borne diseases as impact on properties and local businesses. Marked improvements can be achieved by reviewing the detailed plan for the area to accommodated needs for provision of water ways for draining the area as well as provide development conditions taking into account the natural role of the area as a drainage channel of the city.