Introduction Introduction Chapter 5 Chapter 5
Chapter 1 Chapter 1 Chapter 6 Chapter 6
Chapter 2 Chapter 2 Notes for Indicators Notes
Chapter 3 Chapter 3 Notes for boxes Notes for boxes
Chapter 4 Chapter 4 Indicators Indicators
CHAPTER 3 Printer Friendly printer friendly version
Chapter 1 Rethinking Policy on Urban Poverty

Wrong Way Streets and New Avenues

Trying to Keep the Masses Out: A Failed Strategy

Addressing the Shelter Needs of the Poor

A Quantum Leap: Meeting a New Scenario for Shelter

Regulating Urban Land Markets: Mission Impossible?

Advocacy, Votes and Action: The Need for Leadership

Adding a Dose of Realism

Preparing for the Future

"Running the poor out of town" through evictions or discriminatory practices is not the answer. Helping the urban poor to integrate into the fabric of urban society is the only long-lasting and sustainable solution to the growing urbanization of poverty.(1)

Wrong Way Streets and New Avenues(2)

To meet the needs of burgeoning urban populations, stimulate both urban and rural development and achieve the Millennium Development Goals (MDGs), planners and policymakers should reconsider their bias against urban growth. It is ineffective and often counter-productive. Moreover, it stands in the way of initiatives to reduce poverty.

There is clear evidence that urbanization can play a positive role in social and economic development. Historically, the statistical association between urbanization and economic growth has been strong.(3)Today, cities generally have greater potential than rural areas for reducing poverty. Cities are the main site of economic growth in most countries and account for a disproportionately high share of national economic production:(4)“Countries that are highly urbanized tend to have higher incomes, more stable economies, stronger institutions and are better able to withstand the volatility of the global economy.”(5)

Proximity and concentration give cities the advantage in the production of goods and services by reducing costs, supporting innovation and fostering synergies among different economic sectors. But proximity and concentration also have the potential to improve people’s lives directly and at lower cost than rural areas: For instance, cities can provide much cheaper access to basic infrastructure and services to their entire populations. As a result, urban poverty rates are, overall, lower than those in rural areas; the transfer of population from rural to urban areas actually helps to reduce national poverty rates (see Box 13).



It is commonly assumed that rural-to-urban migration merely redistributes poverty from the countryside to the cities. Yet, social mobility commonly accompanies migration, and poverty rates have been declining in both the rural and urban areas of many countries. A study at UNFPA attempted to look at urbanization’s role in these changes. It broke down the improvements in national poverty rates into three components: the decline of rural poverty, the decline of urban poverty and the rising proportion of the population living in urban areas, where poverty rates are lower.

This procedure, applied in 25 countries, covering different regions and periods, provides a rough indication of urbanization’s possible importance in the overall process of poverty reduction. According to this approach, the urban­ization effect until the 1990s seems to have been fairly unimportant. Since then, however, the transfer of population from rural to urban areas would have accounted for about 10 per cent of national poverty reduction, on average.

In Bolivia, urbanization accounted for 28.3 per cent of the 1.2 per cent reduction in the national poverty level during the 1999-2005 period; 17.0 per cent of Brazil’s 5.1 per cent poverty reduction between 1999 and 2004 was similarly due to urbanization. In Nicaragua, urban and rural poverty levels hardly changed at all between 1998 and 2001; yet the national poverty level fell over half a percentage point as the result of urbanization.

Although this descriptive exercise does not provide conclusive evidence as to whether urbanization has an independent role in promoting poverty reduction, it does suggest that, given the right conditions, it can be a dynamic component of the national poverty reduction process, rather than being a mere escape valve for rural poverty.

People intuitively perceive the advantages of urban life. This explains why millions flock to the cities every year. Yet many planners and policymakers in rapidly urbanizing nations want to prevent urban growth.(6)Such attitudes are not founded on evidence: They also have negative consequences for poverty reduction. The right to the city, proposed by a Task Force in the United Nations Millennium Project,(7)remains elusive in the face of policymakers' prejudice against expanding it.(8)

The reluctance of policymakers to accept urbanization has been a barrier against the flow of advances promoted by urban social movements. In recent years, local Organizations of the Urban Poor (OUPs) and non-governmental organizations (NGOs) have made remarkable headway in collective efforts to improve housing, infrastructure and services, greatly alleviating and reducing urban poverty.(9)Their efforts are being increasingly recognized: The 2006 Habitat Conference was, in many ways, a celebration of their success.

Yet local communities have often had to overcome obstacles put up by local and national authorities, when a more supportive approach could have made a crucial difference. To help urbanization move in the right direction, policymakers need to revise the assumptions that underlie their anti-urban bias.(10)They should be able not only to move with the flow but also to direct it towards improving the urban habitat and reducing poverty. The present chapter illustrates this point with regard to an issue that is critical for urban poverty reduction—the shelter needs of the poor.