Setback distance is a pertinent building restriction that insures proper planning for infrastructure and land use especially in hillside developments. Since Peleng developed as a squatter settlement and there were and still there is no specific hillside regulations guiding hillside developments in Botswana, the paper analyzed the inadequacy of setback distance and how they hindered the improvements of low income hillside neighborhoods. The study then proposed hillside setbacks regulations as mitigation with the intention to influence relevant authorities to implements them.