Urban Housing Challenges and Opportunities in Developing Countries
By Daniel Biau Deputy Executive Director
Urban Housing Workshop
Nairobi, 9-10 June 2003
Your Excellency, Honourable Mwai Kibaki, President of the Republic
Honourable Minister for Roads, Public Works and Housing, Eng. Raila Odinga,
Honourable Minister for Local Government, Mr. Karisa Maitha,
Your Worship the Mayor of Nairobi, Mr. Joe Aketch,
Honourable Ministers, distinguished participants, ladies and gentlemen,
On behalf of the Executive Director of UN-HABITAT, Mrs. Anna Tibaijuka,
I wish to congratulate the organizers of the present workshop on urban
housing for a very timely initiative. at UN-HABITAT, we believe that
the issues of housing and urbanization should be placed at the top
of the development agenda of most African countries which are currently
experiencing a rapid urban transition.
The urban population of Kenya is expected to increase from 10 million
(one third of the total population) in the year 2000 to 21.7 million
(51 per cent of the total population) in 2020. this represents an average
increase of 600,000 people per year in urban areas. Even if these statistical
projections are not fully accurate, they give an idea of the challenges
ahead of all policy-makers.
The Istanbul+5 review, undertaken by the United Nations in 2001,
has shown that many countries have formulated comprehensive housing
policies and strategies. Many of these policies and strategies even
include an appropriate recognition of facts and an assessment of the
limitations that should set the framework for realistic implementation
processes. These policy and strategy documents, however, have been
only partly turned into action.
As UN-HABITAT’s experience over the world indicates, the most important
factor limiting progress in improving housing and living conditions
of low income groups particularly in informal settlements and slums
is the lack of sufficient political will to address the issue in a
fundamentally structured, sustainable and large scale manner.
There is no doubt that political will combined with local ownership
and leadership, and the mobilisation of the potential and capacity
of all stakeholders, particularly the people themselves, are the key
to success. lessons from several countries underscore the importance
and the fundamental role of sustained political will and commitment.
One crucial and common shortcoming in the housing sector is the inadequacy
and limitations of housing finance mechanisms. the fact that conventional
housing finance usually works in favour of middle and high income groups
is reflected in highly segmented housing markets. the poor, low- and
even middle-income majority of the population in most developing countries
cannot afford a loan even for the least expensive commercially built
housing units. Consequently, many low- or even middle-income households
build their own houses progressively over long periods – as long as
ten to fifteen years, or as is the case for the majority of the low-income
population in many cities, they are simply tenants. Upgrading initiatives
should not rely entirely on governmental subsidies or on full recovery
from slum dwellers.
Progressive municipal finance, cross-subsidy mechanisms, micro-credit
schemes and beneficiary contributions should be associated to ensure
Security of tenure is another fundamental challenge in urban housing.
Promoting security of tenure is a prerequisite for sustainable improvement
of housing and environmental conditions. Squatter upgrading projects
need to be carried out and these projects should prevent unlawful evictions.
Governments should focus on regularization schemes in order to provide
incentives to families to invest in their homes and communities. there
is no doubt that every effort should be made to ensure optimal use
of the housing stock and improve the quality of life in existing settlements.
Another important topic requiring attention is the promotion of rental
housing options. Regardless of the nature of existing or new finance
mechanisms, the reality for many poor and low-income urban residents
remains that adequate housing is simply too expensive to own. The majority
of urban residents in many developing countries are actually tenants
in the private informal sector. Data on urban housing tenure in developing
countries are not very reliable but it is estimated that a considerable
number of urban dwellers, probably in the range of 30-50 per cent,
There should be no discrimination against private rental housing
in the national housing policy and the involvement of tenants and owners
in finding solutions prioritizing collective interests should be promoted.
Another major challenge of housing policies is to adopt an adequate
approach to urban land management. Due to rapid urbanization, the urban
poor are forced to find their shelter in illegal settlements located
in a variety of places: customary land, public land reserves, marginal
land or in illegal sub-divisions. The resulting growth of informal
settlements, primarily in peri-urban locations, is often the response
to public inaction, or ineffective interventions that create more problems
than they solve. The dynamisation of land markets is a key element
of any good housing strategy.
With uncertain or illegal land tenure, the low-income, high-density
settlements lack basic infrastructure and services such as drinking
water, sanitation and energy. an important obstacle to increasing investment
flows in urban basic services has been the reluctance of city authorities
to put in place a realistic and sustainable pricing policy that could
ensure cost recovery. Ironically, the affluent groups benefit most
from under-pricing of basic services such as water supply, as the poor
are rarely connected to municipal services and have to rely on the
informal market. Generally the poorest city residents pay the highest
unit price for services, such as water and energy. Governments should
not try to provide top-class infrastructure and services to a minority
but should first expand access of needy groups to basic amenities and
After this review of fundamental housing challenges in developing countries,
i now wish to give you - based on un-habitat's worldwide experience - a summary
of current trends in housing policy around the developing world. Lessons learnt
from good policies can guide national and local governments with limited resources
when they wish to focus on strategic priorities and make best use of the opportunities
offered by the urban economy.
I would like to share with you the eight following principles:
- Governments should promote a facilitating legislative and institutional
framework in the housing sector;
- . They should focus on the development, operation and maintenance
of trunk infrastructure (roads and water supply) at city-wide level;
- They should support the establishment of fair and transparent
municipal finance systems based on equitable land taxation;
- Governments and local authorities should design, adopt and implement
pro-poor city development strategies, ensuring sufficient availability
of public and private land for housing development;
- They should build partnerships with the private sector for the
management of basic services and utilities, such as water supply,
and with private investors and developers for the delivery of both
owner-occupied and rental housing;
- They should strongly encourage and support the efforts and initiatives
of slum-dwellers in the incremental upgrading of their living environment,
through technical and financial assistance;
- They should provide appropriate incentives to the banking and
cooperative sectors, as well as to private foundations and ngos,
in order to direct more resources to the housing market;
- Finally, in terms of process and method, governments should adopt
decentralisation policies, strengthen local authorities and involve
all stakeholders in the elaboration, monitoring and evaluation of
the housing policy, through consultative and participatory approaches.
UN-HABITAT has a wide range of expertise and documentation on these
topics which can be utilized for advocacy, policy advice and capacity-building
at various levels.
to conclude, i wish to recall that the millennium declaration endorsed the
'cities without slums' goal of “improving the lives of at least 100 million
slum dwellers by 2020”. This figure (100 million) sounds huge, but when compared
to the estimated current population of nearly one billion slum dwellers globally,
it is a modest and realistic target. It implies addressing the needs of ten
percent of the world’s current urban population who suffer from diverse aspects
of inadequate shelter, including lack of security of tenure and insufficient
access to basic services and infrastructure.
From the outset, it is clear that such a long-term initiative needs
to fully involve all stakeholders, first amongst them the slum dwellers
and their organisations.
Secondly, all related public authorities at the national, city and
local levels should be the locomotives of this process in terms of
creating an enabling environment.
Thirdly, all related civil society organisations (including Ngos,
research institutes and professional associations) should mobilise
their capacity and potential to contribute to these activities.
At this juncture, I wish to appreciate that the government of Kenya
is fully committed to this millennium development target through the
recently launched Kenya slum upgrading programme, which is supported
with the guidance of its major initiatives on urban and shelter development
namely: the global campaign on urban governance and the global campaign
for secure tenure, un-habitat stands ready to increase its cooperation
and assist all the stakeholders, primarily the government and local
authorities of Kenya, in prioritizing the slum upgrading component
of the national housing policy.
I thank you for your kind attention and wish you full success in