In each stage of development of the vernacular settlement, there must be many decisions to be made to choose the best alternative as part of the urban spatial structure. Vernacular settlement was born from ethnic societies on ethnic traditions, using local techniques and materials. The change and development of the built vernacular must be carried out by multidisciplinary expertise because of the diversity of stakeholders. It is a form of respect for the cultural identity of the community that has been established. This research presents a decision model for development solution of a settlement heritage as urban spatial. There are factors supporting the achievement of successful vernacular settlement as a settlement heritage. The factors are effective design collaboration process, as well as the supporting factors of the concept of sustainability. This study uses satisficing options based on AHP (Analytical Hierarchy Process) method to determine the best solution among three inclusive, exclusive or process combining alternatives. Exclusive means that vernacular settlement is developed in a special function as a cultural preserve or developed in certain clusters in parts of the city. Process combining means vernacular settlement is developed to grow alongside urban development. The selection are determined by stakeholders based on their preferences of the criteria. There are five criteria which are (1) building cultural and cultural heritage, (2) constructive materials and techniques, (3) regional and environmental adaptation, (4) energy efficiency and sustainable design, and (5) natural hazards and risk mitigation. The results show that an "inclusive" design is determined as the most suitable option. It means that vernacular settlement will become part of the development of urban modernization, it can be integrated into various functions of property buildings. This decision can help stakeholders achieve a balanced strategy for the development of vernacular settlements as urban spatial planning.