I think relocation would not be the ultimate approach. Many factors are responsible for informality. Appropiate strategies to tackle the remote caurses of informality would lead to effectiveness of the proces.
Most important is to involve the settlers in the decision making. If resettlement cannot be avoided then people's livelihoods have be be given highest priorities as relocation often has severe negative consequences on the livelihood systems. This must be addressed and solutions must be found together with the settlers.