The concept of the neighborhood unit, crystallised from the prevailing social and intellectual attitudes of the early 1900s by Clarence Perry, is an early diagrammatic planning model for residential development in metropolitan areas. It was designed by Perry to act as a framework for urban planners attempting to design functional, self-contained and desirable neighbourhoods in the early 20th century in industrialising cities. It continues to be utilised (albeit in progressive and adapted ways, see New Urbanism), as a means of ordering and organising new residential communities in a way which satisfies contemporary "social, administrative and service requirements for satisfactory urban existence".
Clarence Perry’s conceptualisation of the neighbourhood unit evolved out of an earlier idea of his, to provide a planning formula for the arrangement and distribution of playgrounds in the New York region. The necessity for a formula such as this was attributed to the rise of the auto-mobile in the early 20th century. During a period where road sense had not yet amalgamated with the social conscious, and many of the urban tools we now use to manage the threat posed by vehicular traffic did not exist, or were not in abundance (such as pedestrian crossings, traffic lights and road signs), developing cities such as New York, which embraced the motor car, suffered street fatality rates in excess of one child a day.
Clarence Perry conceived of neighbourhoods in this time period as islands locked amidst a burgeoning sea of vehicular traffic, a dangerous obstacle which prevented children (and adults) from safely walking to nearby playgrounds and amenities. Perry's neighbourhood unit concept began as a means of combating this obstacle. Ultimately, however, it evolved to serve a much broader purpose, of providing a discernible identity for the concept of the "neighborhood", and of offering to designers a framework for disseminating the city into smaller subareas (suburbs).
While there is evidence that the concept of the neighbourhood unit emerged as early as 1923, at a joint meeting of the National Community Center Association and the American Sociological Society in Washington, D.C., it was the publication of Clarence Perry’s paper, in the 1929 Regional Plan of New York and Its Environs, which led to its promotion as a planning tool. Titled, "The Neighborhood Unit, a Scheme for Arrangement for the Family-Life Community", Clarence Perry’s monograph offered in concrete terms a diagrammatic model of the ideal layout for a neighborhood of a specified population size. This model provided specific guidelines for the spatial distribution of residences, community services, streets and businesses.
Perry’s concept of the neighbourhood unit employed a variety of institutional, social and physical design principles, influenced by such popular notions in the 1920s as the separation of vehicular and pedestrian traffic, and arterial boundaries demarcating the inwardly focused neighbourhood cell from the greater urban lattice. The cellular nature of the neighbourhood unit allowed it to be utilised as a building block in the development of neighbourhood arrays, leading to its systematic modular usage during periods of rapid residential expansion in many countries across the globe.