Abstract: Against the dual backdrop of accelerated urbanization and decentralization of governance toward the community level in China, community-embedded service facilities, crucial for meeting residents' diverse needs and enhancing community public service efficiency, face complex development and operational challenges. This study systematically analyzes key obstacles from an urban renewal perspective, focusing on the utilization of spatial resources, dynamic adaptability, and sustainable operations. The findings reveal that current facility development is constrained by land scarcity, infrastructure deficiency in aging communities, and rigid service demands. Operational challenges include ineffective stakeholder coordination and cost-benefit imbalances. To address these issues, the research proposes several strategies: optimizing spatial resources through promoting multifunctional community service complexes; prioritizing elderly- and child-oriented services through flexible facility layouts and adaptive mechanisms; developing market-driven operational strategies featuring "advance operational planning" for demand matching, "branding operations" to enhance vitality, and "balanced bundling" of for-profit and non-profit services. The study emphasizes the importance of establishing a tripartite collaborative mechanism involving government guidance, market incentives, and community participation to overcome practical barriers such as facility underutilization and unsustainable operations. These strategies aim to enhance service quality, achieve operational sustainability, and revitalize community economies.