Slumming (marginalization) and informal accommodation in present term is the outcome of industrial
revolution emerged following structural changes, and abundant social and economic problems including increased
urbanization, uncontrolled immigrations in different countries around the world, especially third world cities. Iran not
excluded by this phenomenon also experienced urban growth due to increased urbanization. Babol city is of historical
and intermediate cities turned into an immigration pole in Mazandaran province as its high economic potential.
Increased population resulting from natural growth and immigration caused physical and uncontrolled growing so that
urbanization outperforms urban planning, which manifested in developing informal, peripheral settlements. This
research focuses on explaining social and economic factors of forming informal settlements in Babol. Research
methodology was descriptive-analytical and data collection tools included filed observation, researcher field studies,
as well as documents and household inventory. Factors’ effects were analyzed using pathway analysis method.
Research findings show that there are ten most important factors influence forming informal settlement in Babol.
Research results reveal that the two classes of social and economic factors similarly influence forming informal habitats
in Babol.