Lafayette's housing is characterized by established, often hillside single-family homes on generous lots, set among oak-studded hills and winding streets. The stock ranges from mid-century ranchers and traditional homes to larger custom residences, with a distinct scarcity of dense multifamily development outside the downtown. The city's four main residential areas — Happy Valley, Burton Valley, the downtown, and Reliez Valley — offer different settings, from prestigious hillside enclaves to family-oriented neighborhoods near schools and parks.

Lafayette's residential areas are generally grouped into four distinct districts. Happy Valley, in the hills, is known for its larger homes and scenic setting, while Burton Valley offers a family-oriented atmosphere near schools and open space. The downtown district around Mt. Diablo Boulevard provides a more walkable, village-like environment, and Reliez Valley to the north offers hillside and valley properties. Together with Moraga and Orinda, these neighborhoods form the broader Lamorinda community prized for its schools and landscape.

Lafayette's lifestyle is defined by its hillside setting, excellent schools, and quiet, family-oriented character. The walkable downtown along Mt. Diablo Boulevard offers restaurants, cafés, and shops, while the Lafayette Reservoir and surrounding trails give residents easy access to the outdoors. The city's wooded, low-density feel, combined with direct BART service to San Francisco and Oakland, makes it a favored choice for professionals and families seeking a balance of suburban calm and urban access. Community life centers on schools, the reservoir, and downtown gathering spots.

Lafayette is served by two public school systems: the Lafayette School District for elementary and middle grades, and the Acalanes Union High School District for secondary education. Acalanes High School, the first of the district's four high schools, is located in Lafayette and anchors a district that also includes Campolindo, Las Lomas, and Miramonte high schools serving the wider Lamorinda area. The schools are a central reason families are drawn to the community, and private options are available in nearby towns.

Lafayette is served by a BART station on the Yellow Line, located in the median of State Route 24 just south of downtown. The station provides direct rail service to Oakland, San Francisco, and other Bay Area destinations, making Lafayette one of the few East Bay hill towns with its own rapid-transit stop. State Route 24 runs through the city toward the Caldecott Tunnel and the East Bay's larger freeway network, keeping Oakland about thirteen miles away and San Francisco within a short commute.

The Lafayette Reservoir is the centerpiece of local recreation, offering a paved and dirt trail loop, fishing, boating, and picnic areas throughout the year. Rowboats and pedal boats can be rented, and private non-motorized craft are permitted. Beyond the reservoir, the city's hills and nearby East Bay Regional Park District preserves provide hiking, cycling, and equestrian trails, while the Lamorinda area's open space and ridgelines offer scenic views across the Bay Area.