Living well in vacant, decaying housing (8)
I believe the answer is:
dwelling
'living' is the definition.
('dwell' can be a synonym of 'live')
'well in vacant decaying housing' is the wordplay.
'vacant' says to hollow out the word (remove centre letters).
'housing' is an insertion indicator.
'decaying' with its centre removed is 'dg'.
'well'+'in'='wellin'
'wellin' going within 'dg' is 'DWELLING'.
(Other definitions for dwelling that I've seen before include "Living, residing" , "lodge" , "Domicile" , "Living; abode" , "Home" .)