Vulnerable urban fabrics, particularly deteriorated and historic fabrics, have been largely understood and managed within a quantitative and positivist framework in recent decades. This approach, by reducing these fabrics to "sick areas" and focusing solely on physical and density indicators, has failed to comprehend their place-based nature and inherent capacities. Drawing on a theoretical-analytical approach, this paper reinterprets the concept of "place-based development" in confronting vulnerable urban fabrics and seeks to demonstrate how shifting the focus from the "problematic condition" to the "capacitated condition" of these fabrics can provide a foundation for sustainable regeneration and the enhancement of residents' quality of life. Through a critical review of urban planning and regeneration literature, and an analysis of the distinctive characteristics of historic and deteriorated fabrics—including historical-spatial identity, social and neighborhood ties, the prevalence of walkability, and the potential for activating heritage-based tourism and economic capacities—this study argues that a place-based approach is organized in two steps: first, the rejection of a positivist perspective and hasty, purely quantitative responses to vulnerable fabrics; and second, the organization of developmental interventions based on spatial capacities as an "added value" in transforming challenges into growth opportunities. The theoretical findings indicate that adopting a place-based approach not only improves physical and functional indicators but also enhances social cohesion, promotes security, improves urban health, and increases the spiritual and economic values of place. Consequently, it can serve as a foundation for policymaking and regeneration planning in vulnerable urban fabrics.