500 Million Homeless or Poorly Housed in Cities Worldwide

Urban Population Explosion Threatens National Economies

About 500 million urban dwellers are homeless or live in inadequate housing, says the Global Report on Human Settlements, An Urbanizing World, for release in early 1996 by the United Nations Centre for Human Settlements (Habitat), the UN agency that helps governments seeking to improve housing conditions and manage urbanization.

The problem is getting worse because housing cannot keep up with an exploding urban population, which will double from 2.4 billion in 1995 to 5 billion in 2025. Currently, the world’s urban population is growing 2.5 times faster than the rural population.

Housing shortages and poor housing conditions — the results of massive urbanization — are life-threatening. Sub-standard housing, unsafe water and poor sanitation in densely populated cities are responsible for 10 million deaths worldwide every year, and are a major factor in preventable environmental hazards, which are responsible for 25 percent of all premature deaths worldwide. Waterborne diseases alone kill 4 million infants and children annually.

Diseases caused by poor housing conditions and a lack of safe and sanitation also cost much more than prevention. By not dealing with these conditions, governments are eventually burdened with extremely high health expenditures for their populations. For example:

  • The cholera epidemic in Peru not only afflicted 320,000 people — killing 2,600 — it also caused $1 billion in economic damage, proving much more costly than sanitation improvements that could have prevented the outbreak.
  • The plague outbreak of 1994 in Surat, India — a comparatively prosperous city — was attributed mainly to unsanitary housing conditions. Health officials reported that the outbreak killed 54 and afflicted nearly 5,000; it also caused more than $1.5 billion in economic damage and triggered the exodus of 500,000 residents of Surat.

Homelessness is a problem in developed as well as in developing countries. In London, for example, life expectancy among the homeless is more than 25 years lower than the national average.

“The most pressing global environmental, economic and social issues that we will face in the next century will be in cities,” says Dr. Wally N’Dow, the head of Habitat and Secretary General of the United Nations Conference on Human Settlements (Habitat II). “Homelessness and poor housing conditions are at the root of all of these problems. Urban areas have the resources to solve the housing problems — cities account for 50 to 80 percent of most developing countries’ Gross National Product — but waste and mismanagement of urban resources cripples the effort.”

Despite their problems, cities will remain the engines of social, economic and environmental development in the next century and provide the greatest opportunity for the poor. According to the report, the urban poor are three to 10 times better off economically than the rural poor.

Poor urban housing conditions are a global problem, but conditions are worst in developing countries. Habitat says that today 600 million people live in life and health threatening homes in Asia, Africa, and Latin America. The threat of mass homelessness is greatest in those regions because that is where population is growing fastest.

By 2015, the 10 largest cities in the world will be in Asia, Latin America, and Africa. Nine of them will be in developing countries. Bombay, India — 27.4 million; Lagos, Nigeria — 24.4; Shanghai, China — 23.4; Jakarta, Indonesia — 21.2; Sao Paulo, Brazil — 20.8; Karachi, Pakistan — 20.6; Beijing, China — 19.4; Dhaka, Bangladesh — 19; Mexico City, Mexico — 18.8. The only city that will be in the top ten in a developed country is Tokyo, Japan — 28.7.

Overall, 80 percent of the world’s urban residents will live in developing countries by 2025, according to the Habitat report.

“The developing world is now experiencing urbanization in the way developed countries did in the past, with urban populations doubling and tripling in one or two decades,” says Dr. N’Dow, whose agency provides institutional and technical support to governments. “The difference is that urban dwellers in the developing world earn as little as $200 per person in annual income, compared to more than $20,000 in the United States. That means that these cities must manage their money aggressively because there is less to invest in services and infrastructure.”

The future of the world’s cities, especially the management of urban resources, will be the focus of the Habitat II Conference, to be held in Istanbul, Turkey in June, 1996 and dubbed the “City Summit” by UN Secretary General Boutros Boutros-Ghali. The Conference will bring together cabinet ministers, parliamentarians, national and local politicians, members of the private sector and community based and non-governmental organizations (NGOs) to review global economic and urbanization trends and explore solutions to the grave social problems confronting cities.

Some of the findings of the Global Report on Human Settlements:

  • The world’s population is becoming more and more urban. In 1950, only 30 percent of humanity lived in towns and cities, which rose to 45 percent in 1995. By the year 2000, every second human being is expected to live in an urban area. Most of this growth will take place in small and medium-sized towns and cities. The world’s mega-cities of more than 10 million inhabitants currently hold only 4 percent of all the world’s people.
  • Urbanization is occurring as a result of unabated rural-urban migration as well as through the gradual transformation of rural areas to urban centers.
  • Urbanization contributes to national economic and social development. It leads to improvements in the living standards of a considerable part of the world’s population. Most countries with high rates of urbanization during the last decade also experienced economic growth. In addition, an increasing number of cities have taken on significant roles in globalizing the economy, in terms of financial markets, trade and commerce.
  • Poorly-managed cities lead to the deterioration of urban living conditions. Urban poverty results because in many countries, national and local governments cannot plan for the population increases, and fail to provide the required infrastructure, services and jobs.
  • Good governance is needed for sustainable urban development. It requires stronger roles for citizen groups, community organizations and NGOs.

The Global Report compares key housing indicators in 52 low income, low-middle income, middle income, mid-high income, and high income cities. The cities with the worst housing problems include Addis Ababa, Ethiopia, where 79 percent of the population is homeless or lives in substandard housing; Jakarta, Indonesia, with 54 percent; and Bogota, Columbia, with 50 percent.

The Need for an Urban World

The Habitat report says that the shift from agriculturally based to industrial and service based economies has caused an irreversible movement to cities and the urbanization of rural areas.

“Massive urbanization is the only way the world can survive the massive population increase,” says Mathias Hundsalz, Ph.D., who coordinated the report. “Urban areas offer a higher life expectancy, lower absolute poverty, and can provide essential services more cheaply and on a larger scale than rural areas. The problem has never been that cities are worse places to live — they are in fact much better for the poor — the problem is that cities have more and more people living in them and relying on their services.”

Cities have many other advantages. The high population densities mean lower costs per households and per enterprise for the provision of water, waste disposal, and health care. Cities can also provide emergency services much more quickly than rural settlements.

In addition to their ability to provide health and social services, cities foster greater education. This improved education often leads to reduced birth rates. Thus, urbanization will help reduce population growth. The latest global census shows slower rates of population growth in many cities in Africa, Asia, and Latin America, where overpopulation is most rampant.

“The vicious cycle of poverty increasing homelessness, and homelessness perpetuating poverty, can only be broken in cities, because cities have free or inexpensive social services that give the poor a place to start,” says Dr. Hundsalz.

Investing in Safe Homes

The Global Report says that governments need to shift their role from that of an implementor to that of an “enabler” — facilitating housing construction and improvement by the private sector.

“It is unrealistic to expect that governments alone could solve the housing problem,” says Dr. Hundsalz. “Only cooperation between the public and private sector, with government support, will help to overcome existing barriers and mobilize necessary investment flows in the housing sector. So far, lack of financial resources and technical expertise, and ineffective housing regulations have stunted housing growth.”

The reason housing is an important investment: income generated from housing projects stimulates private growth. Building homes requires materials, transportation, marketing, and productive labor, all of which produce a multiplier effect; for every dollar invested on home construction, 3 dollars are added to the national income.

“Housing construction is a particularly sound investment in developing countries because low-cost homes are the most economically stimulating to these economies,” says Dr. Hundsalz. “Countries that can take advantage of the increased urban population by creating jobs and stimulating their economies will not only survive massive global urbanization, but prosper from it.”

“Urban housing projects must break from the traditional stance of waiting for disasters to act on problems,” says Dr. Hundsalz. “Preventative measures saves lives, and their costs are significantly less than the cost of passivity.”

Low cost housing generates 30 percent more income than high cost housing, according to the report. Because the informal sector is more labor intensive than the formal, construction in the informal sector creates 20 percent more jobs and builds six times more per dollar spent than formal sector construction. The report cautions, however, that informal sector construction is prone to health, safety and labor abuses.

Much of the problem in providing housing in the developing world stems from excessive building regulation and codes. Also, increased inflation has led to a fall in construction activities, making the building and construction industry suffer as a result of increased raw material prices.

Another short-run pressure on housing construction in the developing world is government economic reform geared toward privatizing economies. These reforms, which affect taxation, financial markets, product markets, labor markets and social services, are seen by Habitat as helpful in the long-run, but they have reduced public investment in building in the short term. The Habitat report says that one of the key roles for governments is to try to ease the transition from public to private sector investment in housing.

The Community Contracts System developed by the National Housing Development Authority in Sri Lanka is an example of an enlightened governmental approach to squatter settlement upgrading that not only generates improved housing and infrastructure but creates economic opportunities for the residents as well.

Through Community Contracts, residents construct their neighborhood’s physical infrastructure. They build footpaths, drains, wells, toilets and other basic necessities, transforming slums into well-maintained communities. Maintenance and repair is better and easier because the people who do the work also reap the benefits.

The Habitat report concludes that the role of government must change in the urban environment if the needs of the population, especially its poorest members, are to be met. Allowing competitive markets to establish low cost-housing while promoting non-profit and social housing institutions will allow the housing market to build lasting homes, according to the report.

“Neither the government nor the private sector on their own are capable of managing our cities,” says Dr. N’Dow.

List of 52 Urban Centers and Countries Included in Report

Cities from low income countries

Dar es Salaam – Tanzania, Lilongwe – Malawi, Dhaka – Bangladesh, Antananarivo – Madagascar, Ibadan – Nigeria, Delhi – India, Nairobi – Kenya, Beijing (Peking) – China, Karachi – Pakistan, Accra – Ghana.
Cities from low-mid income countries

Jakarta – Indonesia, Cairo – Egypt, Harare – Zimbabwe, Dakar – Senegal, Manila – Philippines, Abidjan – Cote D’Ivoire, Rabat – Morocco, Quito – Ecuador, Amman – Jordan, Bogota – Colombia

Cities from middle income countries

Bangkok – Thailand, Tunis – Tunisia, Kingston – Jamaica, Istanbul – Turkey, Warsaw – Poland, Santiago – Chile, Monterey – Mexico, Algiers – Algeria, Kuala Lumpur – Malaysia, Johannesburg – South Africa

Cities from mid-high income countries

Caracas – Venezuela, Rio de Janeiro – Brazil, Budapest – Hungary, Bratislava – Slovakia, Seoul – Korea, Republic of, Athens – Greece, Tel-Aviv – Israel, Madrid – Spain, Singapore, Hong Kong – Hong Kong

Cities from high income countries

London – United Kingdom, Melbourne – Australia, Amsterdam – Netherlands, Vienna – Austria, Paris – France, Toronto – Canada, Washington, D.C. – United States, Stockholm – Sweden, Tokyo – Japan, Helsinki – Finland, Munich – Germany, Oslo – Norway

Category: Press Release