Slums have generated renewed interest among scholars in the wake of rapid urbanization in the South and the growing incidence of urban poverty worldwide. This gave rise to the expression “expanding urban slums,” which refers to a phenomenon occurring in the Global South associated with “hyper-urbanization”— rapid urbanization beyond the capacity of the state or city to plan for, to provide services and housing for, to regulate urban environments or regulate the poor. The UN Challenge of Slums report describes two kinds of slums: “slums of hope” and “slums of despair.” Slums of hope are “progressing” settlements, characterized by new, normally self-built structures, usually illegal (e.g. squatters) that are in, or have recently been through, a process of development, consolidation and improvement. Slums of despair refer to “declining” neighborhoods, in which environmental conditions and domestic services are undergoing a process of degeneration. Earlier studies of slums differ from contemporary research in terms of the extent to which megaslums are emerging as a permanent feature of megacities. Contemporary studies of the “expanding slum” can be conceptualized as about different aspects of informalization of urban social, economic, and political processes. The literature on urban informality and informalization indicates that slums are not excluded spaces but integrated on different terms. Scholars must begin to develop more nuanced theories of urbanism in a globalizing world, and they can use the “gray zones” of Latin American cities as a starting point.