(1) Background: There is a global trend to stimulate sustainable urbanization by updating the hardware of the built environment with green technologies. However, simply greening the city hardware does not ensure a sustainable urban system. In reality, urban communities, as cells of the city, play a crucial role in the sustainable development of the entire city. (2) Methods: This paper conducts a case study by investigating a community in Taipei with semi-structured interviews and other first-hand data. It examines how self-organization, voluntary groups, and the public participation of community members has successfully institutionalized a governing system for the sustainable development of communities; (3) Results: This paper identifies the major actors and mechanisms underpinning the sustainable development of urban communities with a case study in Taipei. The establishment of this more cost-effective form of community governance will possibly provide more benefits to community members; (4) Conclusions: This case study will shed light on the sustainable development of urban community in many other cities, offering possible pathways and epitome for self-organization of urban community in the coming era. Its cost-effective institutional design contributes greatly to sustainable community development, partly solving the current failure to promote urban sustainability.