In urban residential environments in Australia and other developed countries, Internet access is on the verge of becoming a ubiquitous utility like gas or electricity. From an urban sociology and community informatics perspective, this article discusses new emerging social formations of urban residents that are based on networked individualism and the potential of Internet-based systems to support them. It proposes that one of the main reasons for the disappearance or nonexistence of urban residential communities is a lack of appropriate opportunities and instruments to encourage and support local interaction in urban neighborhoods. The article challenges the view that a mere reappropriation of applications used to support dispersed virtual communities is adequate to meet the place and proximity-based design requirements that community networks in urban neighborhoods pose. It argues that the key factors influencing the successful design and uptake of interactive systems to support social networks in urban neighborhoods include the swarming social behavior of urban dwellers; the dynamics of their existing communicative ecology; and the serendipitous, voluntary, and place-based quality of interaction between residents on the basis of choice, like-mindedness, mutual interest and support needs. Drawing on an analysis of these factors, the conceptual design framework of a prototype system — the urban tribe incubator — is presented.