The purpose of the research is to discuss the use of outdoor environment of the elderly residing in the older urban settlements in Taiwan. It intends to evoke the public awareness of the incremental need of dementia-friendly environment for the Taiwanese society in the next thirty years. This paper first, to discuss the relationship between aged society,,dementia disease and the tendency of aging in place; second, to introduce the approach of dementia-friendly environment studies in the UK, looking for design factors from outdoor experience, environmental recognition and physical barriers of the elderly, and summarized as dementia-friendly design principals; further, this paper takes Ling-Ya district of Kaohsiung as an example, to discuss the qualitative and quantitative aspects of the use of the urban open space in Kaohsiung’s older settlements; finally, to assess the area enhancement policies of the city authority. The conclusions of this research indicate that, to promote the quality of life for the elderly of the communities, to enable the elderly with dementia aging in place, the area enhancement projects in the older settlements should be included with the considerations of social well-being, enhanced design considerations rather than being construction-oriented. It suggests that, to proceed to inclusive- design environment for ‘neighborhood for life’, the governments should conduct local-based dementia-friendly environment research, delineate design guidelines to be integrated with other urban environmental design policies.