The effects of Gated Communities (GCs) were analysed. According to the literature, these urban artefacts are negative for society. They are blamed to provoking social segregation, social exclusion and undermining democracy. In a Latin American context the consequences could be worse. Latin America has the highest level of social inequality in the world and the rapid growth of GCs is making this inequality more visible. This study implemented the concept of Social Capital, in order to understand the urban problems in this urban geography. The study is based in Machala, a mid-sized city in Ecuador. It was found that GCs’ residents lack of trust of outsiders, residents are more distant from disadvantage groups, social networks are being homogenised and there is a stigmatisation of life outside the community’s walls. This study seeks to create awareness on the type of urban growth in Machala by exploring the consequences of fragmentation, privatisation and segregation via GCs.