Through a case study of the 3rd overall urban development area in Taichung City, this research provides suggestions for land use policy to minimize the conflict between urban development and the rights of citizens in the future. Taichung city government started the land readjustment project in 2004. There are fourteen readjusted units within the overall development area, which includes nine privately held units and five units in the governmental sector. Although land readjustment is a method to solve the land use problem and support urban development, it nevertheless poses disadvantages. Significantly, there are many controversial issues, such as the unequal distribution of readjustment bonuses and offset expenditures, land usage, and the preservation of historical and cultural heritage, in the private development sectors of the 3rd overall urban development area. This research uses qualitative methods, including interviews, participant observation, and the analysis of secondary data. Interview participants included real estate developers, government officials and local residents. To conclude, this study provides recommendations for land readjustment in different stages of development to ameliorate problems and conflicts associated with future urban development in the future.