In South Africa, informal rental accommodation constructed in the backyards of formal houses is the fastest growing housing segment. These backyard dwellings (BDs) are makeshift structures made from timber frames, metal sheets or wooden planks. Despite the proliferation of BDs, national and local governments have done little to improve the living standards of backyard dwellers. The research uses focus groups, interviews and building surveys to examine the current state of backyard dwellings and identify opportunities and barriers for government interventions. We analyse the barriers to home improvements, highlighting the important role of tenant dignity and landlord-tenant relations. Furthermore, the research discusses the challenges of potential government-led interventions, which could easily fail in the context of resistance, mistrust and anxiety over housing. We present four key considerations that any intervention to upgrade BDs in South Africa or similar rental units in other localities must consider.