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close this bookThe Human Settlements Conditions of the World's Urban Poor (HABITAT, 1996, 233 p.)
close this folderVII. Agenda for future work
View the document(introduction...)
View the documentA. Countering urban poverty
View the documentB. Shelter, good governance and the enabling role
View the documentC. Specific policy areas in need of development
View the documentD. Strengthening shelter strategies for the poorest groups
View the documentE. Harnessing the benefits of research
View the documentF. The future role of local authorities
View the documentG. The role of CBOs and NGOs
View the documentH. The role of the private commercial sector


This chapter is concerned with two primary issues; firstly, from the foregoing account of the human settlements conditions of the urban poor and a discussion of some of the key issues, it sets out an agenda for future research and direct support considered necessary to establish a sustainable approach in addressing the problems of urban poverty and degraded shelter and environmental conditions. Secondly, it considers the changing roles of the public sector, of NGOs and CBOs, and the private commercial sector in seeking to counter the deterioration of human settlements conditions.

A. Countering urban poverty

In view of the increasing numbers enduring urban poverty in various regions of the world, the most pressing task for action is to explore systematically ways of countering this growing trend effectively. In some countries undergoing SAPs the World Bank has been persuaded of the need for compensatory programmes of intervention to mitigate the most adverse consequences of macro-economic reform. These programmes have included a reallocation of public expenditure to protect areas of social provision such as primary health care and education, and other measures have included public employment schemes and a targeted programme of nutrition and food assistance (Moser and others, 1993). But as UNICEF has subsequently pointed out, “these programmes do not... attack the root causes of structural poverty” (van der Hoeven and Anka, 1994).

There is, therefore, an urgent need to complement the ‘safety net’ strategy of the World Bank with a pro-active programme which systematically and exhaustively explores the opportunities afforded by shelter and human settlements development and upgrading as a means of creating economic opportunities for the urban poor. This theme has underpinned work undertaken by UNCHS (Habitat) and ILO for some time and this report strongly endorses the establishment of the Urban Poverty Partnership Programme. This inter-agency initiative seeks to address:

· practical measures to generate or increase productive employment of people living in low-income communities - including labour-intensive urban infrastructure projects, micro-enterprise initiatives, and supporting credit schemes;

· measures to improve the physical living conditions of residents in low-income communities - their housing, sanitation, water supply, waste disposal, drainage, access roads; and

· opportunities to share in the planning, prioritizing and implementation of local development, and to gain greater access to and influence over resources for local development which could improve employment, incomes and physical living conditions” (Ministry of Foreign Affairs, the Netherlands, 1993).

The programme will operate at the community level, seeking the genuine participation of poor communities in local programmes drawing in NGOs, CBOs, local and central governments and the private sector in a partnership approach to maximize opportunities for the urban poor. By combining their expertise and resources, and indeed by inviting the participation of other donors, the United Nations agencies hope to ‘maximize synergy’ between their individual programmes. UNCHS (Habitat) and ILO have recently made a number of more detailed recommendations in respect of employment generation from shelter provision and human settlements development. These include:

· the call for an urgent shift in attitudes and approaches which links shelter provision and major public works programmes to anti-poverty strategies through the use of labour-intensive initiatives to create unemployment opportunities for the urban poor;

· the encouragement of a positive environment for small-scale contracting in shelter provision and upgrading through training and advice and guidance; the availability of raw materials and local sources of finance; and the empowerment of households to be able to deal with small contractors;

· the acknowledgement of shelter as a workplace and the encouragement of HBEs; and

· the development of a series of pilot projects to examine the potential of small-scale contracting in scaling-up the level of low-cost shelter provision and in exploring ways of integrating work-place and residential space in a variety of different circumstances.

An important element of this new approach will be a need to share experiences and ideas between organizations and communities, which in turn also emphasises the need for an effective monitoring role and the wide dissemination of findings. These programmes also afford an important opportunity for a more detailed research role which should be carefully considered. Amongst the wide range of potential topics for comparative research, for example, could be the economic impacts on poor communities of labour-intensive approaches; or social issues, such as the effect of local programmes on the role of women; the impact of such programmes on social cohesion, integration and self-reliance; or issues of urban governance, such as the organizational dynamics between CBOs, NGOs and municipal authorities. In order to be effective, the research programme needs to be planned as an integral part of the local programme and designed in such a way which contributes directly to the implementation of the programme itself.

B. Shelter, good governance and the enabling role

A second issue of major concern is the capacity and competence of urban administrations to deliver effective public services within an enabling framework in the area of shelter and urban infrastructural provision. The new role perceived by the international agencies implies three major areas of responsibility for local authorities:

· they will continue to deliver certain core services to the community, e.g. basic services such as nutritional programmes, primary health care and education;

· they are to assume responsibility for providing a strategic policy framework for the delivery of urban services; and

· by working with or through other bodies (i.e. NGOs, CBOs and the private sector), they are to ensure the enablement and regulation of service delivery within the context of the strategic policy framework.

Batley (DAG, 1994), argues that these enabling and regulatory roles “assume that government has the capacity of oversight, analysing the operation of markets, identifying the need for intervention and setting the policy framework for other sectors”. Yet, “there is scarce evidence” that such administrative capacities exist in many developing countries. The development of shelter strategies is one area where enablement is highly advantageous and there is an urgent need for local authorities to acknowledge the contribution of poorer communities and work closely with them. But in the context of the chronic and increasing need for shelter, scarce and declining public sector resources, poor market conditions, a weak political and administrative framework and a demoralized public sector in the wake of the depletion of resources through SAPs, the formulation of enabling shelter strategies will be very challenging indeed. Such strategies will demand innovative thinking, the forging of new relationships and administrative procedures, the need for an overhaul of old regulatory structures, and the capacity for analysis and a more entrepreneurial approach. This is a highly challenging agenda with intrinsic technical and political difficulties for which there is no prescription and very little guidance.

The international agencies and indeed some governments are already committed to strengthening urban local government through the decentralization of powers and functions, but if these new responsibilities are to be effectively undertaken there needs to be much greater support for the public sector and a major international initiative in training, guidance and support for local authorities. In the shelter sector in particular there is an urgent need for training and institutional development to increase the competence of technical officers, administrators and politicians in seeking to identify shelter solutions for the urban poor in the context of more market oriented strategies. Such an initiative needs to incorporate a research oriented approach similar to that embodied in the UNCHS (Habitat)/DANIDA Community Development Programme, in order to draw on emerging international practice and to build an analytical capacity into enabling strategies which increases their relevance for the urban poor. An integrated research and training programme would identify good practice, highlight successful partnerships, record procedural arrangements and seek to explore other effective mechanisms for extending shelter to the urban poor. Through training, good practice guidance and publications it would disseminate such information as widely as possible.

C. Specific policy areas in need of development

Whilst the capacity of local authorities to adjust to new roles needs greater support, it remains the case that the preconditions necessary for the development of market mechanisms in the shelter sector are also poorly developed in many developing countries. One may highlight by way of example three particular areas of activity:

· the legal and institutional environment for the ownership, transference, and management of land;

· personal savings and private sector institutional housing finance; and

· the underdevelopment of local materials production, marketing and distribution.

1. Improving the effectiveness of the land market

The ownership and control of land remains a fundamental issue perpetuating poor housing conditions in developing countries, and as observed earlier (see sections VI.E. and VI.F.), the effective operation of the land market is also essential to the development of institutional housing finance. A shift towards market mechanisms will require a more effective legal and institutional framework for the planning, registration and disposal of land. A greater emphasis on market mechanisms per se, however, is unlikely to operate to the advantage of the urban poor unless local authorities have the competence, procedures, financial resources, and political will to intervene more effectively in the land market, and via a range of measures such as those outlined in section VI.E., to ensure a regular supply of developable land, directly available for their use. Whilst both these areas, i.e. the legal and institutional framework and the competence of, and resources available to, local authorities, need strengthening, there is a danger that the drive towards privatization will eclipse the imperatives for intervention, and most particularly, will not yield the financial resources necessary for local authorities to purchase land directly on behalf of the urban poor.

2. Encouraging the development of institutional housing finance for the urban poor

The urban poor are also disadvantaged by their lack of access to institutionalized credit and whilst market circumstances have been far from ideal in recent years for the extension of credit facilities to low-income groups, informal credit mechanisms remain widespread, and a number of initiatives have occurred. These initiatives to extend “down-market” lending appear to reflect two different basic approaches. Firstly, existing housing finance institutions are seeking to circumvent the perceived problems of high risk and high transaction costs by modifying conventional lending criteria. Typically this means on-lending earmarked funds at subsidized interest rates and over longer terms in order to extend lending to low-income groups. To overcome problems of access for clients, housing finance institutions are seeking to work in partnership with NGOs. In this ‘facilitated lending’ situation, the loan is made directly by the housing finance institutions to the borrower, but the NGO may assist with the loan origination and servicing.

In the second case, financial intermediation is done by a community-based financial institution using funds loaned by an housing finance institution or other financial institution. In these circumstances the community based-finance institution seeks to tailor loans more appropriately to the needs and affordability of the poor (most particularly in respect of the absence of security), and also uses its peer group association to reduce risk. Several changes to conventional lending practice are envisaged, however, and these include a wider use of insurance cover, the establishment of a ‘delinquency risk’ fund linked to recovery performance, and loan spreads which ensure coverage of the higher transaction costs associated with a larger establishment (Mehta, 1994).

Both of these innovatory credit arrangements are in their infancy. Much technical and advisory support has already been forthcoming from national and international sources and much remains to be done before the projects may be deemed to be effectively operational. It will be necessary to initiate pilot schemes and to monitor and evaluate the outcomes, but these are important initiatives which appear to offer great scope for application amongst poorer groups in many other developing countries.

3. The enhancement of local materials production

Section VI.G. illustrates how the production of indigenous building materials has not been able to keep pace with demand and that the cost of materials in many developing countries has risen steeply in recent years. At the same time, local materials production is often characterized by low productivity, fragmentation, problems of distribution and poor marketing. Increasing the efficiency and organizational capacity of local materials production in particular countries would seem to offer a number of advantages, such as, increasing economic output and reducing the need for costly imports; increasing supplies to reduce shortages and therefore costs; providing increased job opportunities, especially for women and low-income groups; and encouraging low-cost shelter options for the urban poor.

For these reasons this report endorses the recommendations made by UNCHS (Habitat) on building materials for housing in 1992 (see section VI.G.) (UNCHS, 1992a). The latter report advocates that operational strategies at national level should concentrate on developing, transferring and diffusing new technologies; creating a supportive policy environment and strengthening institutional support. It also strongly recommends greater cooperation amongst developing countries, especially on a regional basis, in sharing ideas, experience and expertise, as well as greater North-South cooperation to provide appropriately targeted development finance, improved technology, and technical expertise. In supporting these recommendations this report highlights the need for national strategies to maximize the benefits for low-income groups, and especially women, in terms of job opportunities and training in the production, distribution and sale of materials; in promoting easier access to local materials for self-building purposes or renovation; and in encouraging innovative says of reducing the costs of materials, e.g. through bulk purchase arrangements or building-materials ‘banks’.

D. Strengthening shelter strategies for the poorest groups

In seeking to strengthen shelter strategies for the very poorest groups there is a need for action at two levels, firstly, at central government level in persuading governments not to abrogate their responsibilities to the urban poor; and secondly, at the operational level, to use such resources as are available in the most effective way to promote the interests of the poorest.

For many years housing investment came to be perceived by governments as a drain on scarce public sector resources. Recent shifts in international policies through SAPs and the GSS have imposed tight restrictions on public expenditure and encouraged a more market oriented approach towards shelter provision. Given the severe economic problems confronting governments in many developing countries and the lack of political influence exercisable by the poorest groups, there is a danger, as articulated by Coulomb (1994) in Mexico, that shelter issues will slip even further down the list of priorities as governments’ feel that such problems are now to be dealt with more appropriately by market forces. There remains a need to counter such perceptions by strongly promoting the arguments outlined by UNCHS (1994) and UNCHS/ILO (1995) and elaborated in chapters III and VI above, favouring enhanced investment in the shelter sector, not only from an economic perspective but also from the health and environmental viewpoints advocated by Agenda 21. Habitat II will provide an important international opportunity for promoting the case for greater investment in shelter and human settlements development.

Invariably, however, public sector resources will remain modest in relation to the shelter needs of the urban poor, hence the need to consider carefully the use of these resources in local shelter strategies. Local authority staff as well as those in NGOs are likely to need training and institutional support in order to formulate and implement strategies which determine priorities and use appraisal techniques to make best use of scarce resources between various policy options. These options are likely to include, the acquisition of development land for the urban poor; low-cost new build programmes (e.g. sites-and-service schemes); incentives to encourage slum improvement programmes; infrastructural investment and relocation projects; the use of public funds to lever private resources through partnerships; the formulation of incentives to encourage ‘responsible renting’ in the privately rented sector; and the direct use of resources for shelter provision for the most disadvantaged groups, such as, street children, the homeless, the physically and mentally handicapped, some women-headed households, etc., a sadly neglected area of local policy. Currently only the authorities of the largest cities are capable of conceptualizing strategies of this kind and working towards their implementation. For enabling strategies to work, however, this implies that local authorities will have to analyse and respond to the local housing market in a way they have not done hitherto. It also implies accepting more directly responsibility for formulating local policies which make provision for the neediest groups.

E. Harnessing the benefits of research

The World Bank (1991) has decried the apparent reduction in urban research activity during the 1980s and called for the “reactivation” of urban research in the 1990s. Others have pointed out that there is a growing “gulf” between the research community and the agenda for action by practitioners in the field of shelter and human settlements development. Both of these statements implicitly underline the importance of research to urban policy development and the need for a stimulating policy dialogue between research and practice. Whilst there is no shortage of ideas for research, in recent years there has been a shortage of resources to support critical and substantive research programmes.

There are a variety of roles which research can fulfill and it is relatively easy to identify recognizable gaps in research coverage. Firstly, in reviewing areas of fundamental or substantive research it is possible to identify several areas which need to be addressed. There has been, for example, remarkably little research which has analyzed the impact of SAPs and macro-economic reform on the shelter policies of developing countries. Secondly, whilst policy-makers advocate increased recognition of the role of the privately rented sector there is little understanding of what this means in terms of living conditions, landlord-tenant relations, or the level of rents payable. Initiatives designed to promote private renting are few and far between and there is little knowledge of what incentives or safeguards may be necessary to encourage ‘responsible renting’ as a component of shelter strategies. Thirdly, whilst the World Bank has established its Housing Indicators Programme and UNCHS (Habitat) has more recently begun an Urban Indicators Programme, there has been very little research which seeks to understand the dynamics of local housing markets, or indeed whether a ‘market’, as such, exists at all! Each of these areas (and there are others), raises some fundamental questions for policy-makers which are not currently being addressed effectively.

A second role for research is monitoring and evaluation. Such research is usually linked to an innovative project or area of policy. There is considerable scope for additional monitoring and evaluation work especially in association with the shelter initiatives of international agencies. There are also other important shelter and urban development programmes where monitoring ought to be included and is currently absent or ineffective in feeding back into decision-making.

Thirdly, research may be used to identify and promote innovation and good practice. A good example of such a research programme already mentioned is the UNCHS (Habitat)/DANIDA Community Development Programme (see section VI.D.) from which a worldwide capacity for advice, guidance and training has been developed. If additional resources were forthcoming from international donors, this kind of research/action could be extended to include other policy areas, e.g. local economic development and shelter partnerships.

By definition the two former types of research are prescriptive, i.e. the areas of work may be defined and research bids invited, whilst the latter is more responsive, i.e. the research depends on the initiatives and their location. There is a need to harness all three types of research and, in the context of the increasing internationalization of global shelter strategies, to ensure an increasingly comparative dimension to shelter and urban research programmes. The international research community is responding organizationally to this need through the formation of shelter research networks. The European Network of Housing Researchers has grown rapidly since its inception in 1989; an Asian Housing Research Coalition has recently been established and an African network is proposed. With encouragement and support these networks should facilitate more effective communication between researchers, practitioners and donor agencies, more effective dissemination of research findings, and provide greater scope for inter-regional research collaboration.

Habitat II provides an invaluable opportunity for restoring the policy dialogue between researchers and practitioners, but this dialogue also needs to include donor agencies. It is important that one of the aims of Habitat II should be to identify and acknowledge a research agenda for the future, arising out of the debates and policy decisions of the Conference. This needs to be complemented, thereafter, by a regular series of events, workshops, seminars and conferences, organized around major policy issues associated with urban development and the GSS.

F. The future role of local authorities

The three major roles envisaged for local authorities have already been outlined and discussed (see section B above), this section will seek to explore some of the implications of these roles for human settlements development. Local authorities will be expected to assume a more strategic function. This implies that they will be expected to increase their effectiveness in at least three areas of urban development, firstly, in urban planning and land management. They will be expected to anticipate population growth and urban expansion and to exert greater control over that expansion in accordance with a planned strategy which seeks to maximize the use of resources whilst minimizing the growth of illegal and squatter settlements. Secondly, they will need to plan carefully the provision of infrastructure not only for it to be effectively coordinated with planned urban growth, but also to extend its coverage of the existing urban environment. Thirdly, local authorities will be expected to begin to formulate local shelter strategies which seek shelter solutions much more within the context of the operation of the local housing market. The adoption of a strategic approach implies a much more pro-active and entrepreneurial approach than most local authorities are accustomed to, a substantial improvement in their information base and a greater analytical capacity than hitherto.

For the implementation of these strategies local authorities are expected to continue with some of their core administrative activities, e.g. land-use planning, but to rely increasingly on an enabling approach to secure policy objectives. Hence, it is anticipated that local authorities will increasingly withdraw from the role as a direct provider of shelter (except perhaps with respect to the poorest groups), in favour of a greater reliance on other bodies (CBOs, NGOs and the private sector). Principally, as far as programmes for the urban poor are concerned, this will mean working more closely with NGOs or with the communities themselves. This will again involve local authorities in a more pro-active, creative and catalytic role than hitherto, seeking to explore innovative solutions to the backlog of shelter, providing technical advice, guidance and incentives to encourage upgrading, working with NGOs to secure new building arrangements, exploring potential partnerships with landowners and developers, and so on.

Local authorities must also retain their role as regulators, however; a role which is performed with enormous variation in developing countries from the exercise of Draconian powers to a practically non-existent influence. In this role local authorities are having to adjust to a presumption in favour of more market-oriented strategies which will require major changes in attitudes and approaches. Calls have been made, particularly in the areas of building and planning regulations, for example, for greater flexibility in the exercise of codes and standards. Whilst the liberalization of codes and standards is justified, it does highlight the need for enhanced professional competence in making judgements which safeguard the health and safety interests of the community at the expense of the individual.

In conclusion, these new roles for local authorities, in seeking to develop enabling strategies in shelter and human settlements development, will be highly challenging.

G. The role of CBOs and NGOs

The GSS places great emphasis on the role of CBOs and NGOs. This is a recognition of the reality that low-income communities themselves are the main providers of low-cost housing in developing countries and that these communities can provide housing at lower cost and on a much larger scale than government organized programmes (UNCHS/ILO, 1995). To improve the quality of informal settlements and extend infrastructure, however, and to ensure minimum standards in newly built settlements, these communities require a clear policy framework and support from government as well as readily available advice, guidance and organizational support from intermediary organizations, such as NGOs.

As outlined earlier (section VI.A.), UNCHS (Habitat) acknowledges that NGOs exercise comparative advantage not only in working with local communities to produce low-cost shelter and infrastructural provision, but also in mobilizing those communities and mediating between them and government officials or the private sector (UNCHS, 1993b). Turner (1988), also identifies three roles for NGOs in human settlements development, first as enablers of CBOs; secondly, as mediators between communities and the authorities controlling access to resources, goods and services; and thirdly, as advisors and consultants to those authorities on ways of amending rules and regulations in order to permit greater freedom for communities to develop and to access resources. They may also act as technical advisers to the communities themselves and provide training as part of their repertoire of activities.

NGOs and CBOs are by definition, however, very diverse organizations. They are unelected, or voluntary, organizations and whilst they may employ staff, they are invariably non-profit making bodies. They are inspired by a social commitment and their accountability is vested in the local communities they serve. They also vary very much in size, organizational structure, capacity and technical competence. Hence, the precise nature of their activity and the role they perform is often locally determined. In seeking to harness the involvement of NGOs in local shelter strategies, therefore, the task confronting governments is how to provide a clear policy framework within which very divergent NGOs can make a positive local contribution.

Experience suggests that this is not an easy proposition. Whilst there are many examples of effective partnership arrangements between governments and individual NGOs, involving NGOs in a strategic way appears to be more problematic. In Chile, for example, following the restoration of democracy in 1990, the government embarked on a national shelter strategy which sought the collaboration of NGOs in a community-based, participatory programme targeted on the poorest households. The involvement of NGOs, however, has not worked as well as was expected:

“On the one hand these organizations are few, they do not exist all over the country, and they normally work on a small scale. On the other hand, the coordination and collaboration between the Ministry of Housing and the NGOs has led to significant problems that in some cases have ended in many NGOs losing interest in [participating in] the [Progressive Housing Programme]” (Fernandez Prajoux, 1994).

The principal problems alluded to were, firstly, over the legal status of NGOs and the exclusion of any political activity from their remit; secondly, the financial strength of NGOs and most particularly those in receipt of government finance for development; and thirdly, difficulties in arriving at mutual procedures between government and NGOs. Alongside these problems, difficulties have also arisen over the levels of funding made available to NGOs, and over what the NGOs regard as exclusion from decision-making over policy.

The work undertaken by the NGOs confirms the advantage of their involvement, however; “the programmes which involve NGOs strengthen the solidarity of the groups living in extreme poverty and improve their quality of life as an expression of a new type of relationship within a more democratic and equitable society” (Fernandez Prajoux, 1994). What the Chilean experience demonstrates, is that despite a strong and mutual commitment to a collaborative working relationship it takes time and considerable effort to develop workmanlike procedures in a workable partnership.

H. The role of the private commercial sector

The enabling approach to urban administration envisaged by international agencies sees a broader role for the private sector and indeed the privatization of some functions previously the responsibility of government bodies. Since the main concern of the commercial sector is profitability, it is not immediately apparent that this will improve circumstances for the poorest groups. It must be remembered, however, that these groups are often already dependent on the private sector for a number of urban services. Renting from a private landlord, for example, is very common amongst low-income groups; water may be purchased from vendors if a public supply is not available; and urban forms of transport are often also privately owned.

The increasing emphasis on the private sector, however, implies that in seeking to improve or enhance provision for the urban poor, whether it be in terms of the availability of land for development, the provision of shelter, or improvements in infrastructure and urban services, local authorities will increasingly have to seek solutions which draw on the resources of the private commercial sector. The implication of this is increasing dialogue between the sectors over issues of urban management and service delivery. Already in many developing countries, often as a consequence of SAPs, there are discussions of this kind over the delivery of basic services such as water-resource management and solid-waste disposal. One would expect this kind of dialogue, or joint working, to extend to issues such as the availability of land for development in order to seek to resolve current difficulties over land scarcity and the absence of land for the urban poor. The development of local shelter strategies is likely to involve similar types of discussions between local authorities and housing developers, land holders, landlords, financiers, and others, in an attempt to examine potential partnership solutions to improvements in shelter provision.

One area in which the private commercial sector has been active for some time is in seeking to extend credit facilities to low-income groups for shelter development and upgrading. Although these developments are tentative at present (see section VI. F), they are likely to become more important in future.

A further area of activity in which the involvement of the private commercial sector is likely to be much more actively sought in the future is in the field of local economic development as part of poverty alleviation strategies. Advice and guidance from the private sector is likely to be increasingly needed in the area of SSE and HBE development (and encouragement). Private sector expertise is also likely to be necessary in developing training programmes in relation to local labour needs and developing local enterprise strategies (UNCHS/ILO, 1995).