Slum inhabitants have a significant environmental effect from their activities, and their living circumstances leave them open to several types of deprivation. As a result, this study modifies the global Multidimensional Poverty Index (MPI) to analyze living conditions in a few chosen coastal slum communities in Lagos State, Nigeria. The living standard dimension is the focus because indicators under this dimension show conditions that affect both slum people and the environment. Three large slums in Lagos State—Makoko, Ilaje, and Iwaya—were chosen for this study using a cross-sectional survey design. The sample for the study was done using a multi-stage sampling process. A total of 250 respondents were sampled, but only 218 responses were used for further analysis. To accomplish the study's goals, descriptive statistics and fuzzy set analysis were both used. The living standard dimension score reveals that two of the three slums under investigation—Makoko and Iwaya—have extremely substandard living conditions, as indicated by the usage of unfriendly fuels (such wood and charcoal), unhygienic sanitary procedures, and substandard housing units. The scores generated for Ilaje reveal that the area is the least destitute in the indicators studied. However, this does not mean that there is no deprivation in the slum. The study suggests taking preventive measures to lessen the use of dirty energy and eliminate unhygienic habits in the slums.