Applying the circular economy (CE) in practice continues to challenge environmental design. Studies regarding the design for a CE have been theoretical and conceptual; hence limited research has been conducted on practical applications. This paper argues that informal settlements already implement core CE practices such as recycling, indexing, and reusing materials in construction and thus can provide critical observations on core CE practices in industrialized regions. This research applies this approach using a case study on the outskirts of Medellín, Colombia. Using a mixed method of video interview analysis and participatory observations, the results of this research are concluded in two conceptual frameworks: incremental circularity and engaged placemaking, which are then applied to CE core ideas. Finally, the paper discusses the critical values generated by studying informal urban forms and their application limitations in the formal economy.