A run-down area surrounding yard becoming place of refuge (6)
I believe the answer is:
asylum
'place of refuge' is the definition.
(I've seen this before)
'a run-down area surrounding yard' is the wordplay.
'run-down area' becomes 'slum' (I've seen this before).
'surrounding' means one lot of letters goes inside another.
'yard' becomes 'y'.
'slum' enclosing 'y' is 'sylum'.
'a'+'sylum'='ASYLUM'
'becoming' acts as a link.
(Other definitions for asylum that I've seen before include "Institution for care of the insane" , "A shelter from danger or hardship" , "Shelter given to refugee" , "Sanctuary or kind of hospital" , "Safe place of refuge" .)