The Town of Clayton faces minimal development pressure from urban areas, but is facing increased residential development pressures from people looking to retire or purchase recreational property in a rural area.
The Town of Clayton has three incorporated communities adjacent to its borders. The Village of Bell Center (pop. 116) southwest of the Town of Clayton is comprised primarily single-family homes and has no public sewer and water services.
The Village of Soldiers Grove (pop. 284) is entirely located within the Town of Clayton on State Highway 61/131. Public sewer and water from the Village of Soldiers Grove is extended to approximately five homes located in the Town of Clayton just to the east of State Highway 61.
The Village of Gays Mills (pop. 627) is located to the southwest of the Town of Clayton along State Highway 131. The village is also home to numerous businesses and the county fairgrounds are located in the village.