In Taiwan, the state plays the most important role in shaping the development of urban space. The state owns relative autonomous power, and it employs powerful land use policies to shape urban space. Among them, urban planning is one of the most specific and prominent means used by the state. It is important to note the intention, design, and implementation of urban planning is definitely not in a vacuum condition. It is full of politic, economic and interest considerations, not solely decided by planning experts or bureaucratic administrators. This is the valuable reason to explore and understand it. Accordingly, this paper discusses the theoretical framework of urban politics and takes the Tree Valley Estate located within the Tainan Science-Based Industrial Parkas a good example for study. Interactive relations and power structure among local government, central government, and interest groups are detail investigated. The ways that they manipulate the distribution and consumption of urban space are also examined. The paper will also show that it is because of the unequal power structure which creates the dilemmas of land use policy in Taiwan.