Co-production is more than an idea; it is a gathering of thoughts collaborating to find common results. Co-production within the community becomes successful when the community people lead their processes themselves. Through this theme, the communities can enhance their capacity to respond constructively to future problems. Besides, community people, the government, and other organizations play important roles in regulating, financing, and managing the whole process, being potential actors. Slowly, a transformation is taking place in the relationships between the stakeholders—that is, being equal partners in development. This type of relationship strengthens the sustainability of community development initiatives. In some cases, the application of co-production at the grassroots for a better life has encountered numerous challenges limiting participation at various levels. Our study aims at exploring the concept of co-production in housing scenarios, identifying the outcomes of this concept by indicating active roles encountering diverse ways that actors and participants may face challenges to make it successful in the housing process. This paper also focuses on finding out the benefits and drawbacks of co-production in housing and the effectiveness of management policies in the context of Bangladesh. For achieving these objectives, an effective literature review of the existing knowledge on this theme of “Co-Production” has been followed as the study methodology. The results from this study depict that co-production within a community can be an alternative approach to addressing the housing issues of the underprivileged community of society. Although having the challenges of socio-economic and political dynamics, a flexible participatory approach to co-production can be successful in Bangladesh, with an appropriate management policy undertaken by the stakeholders.