At its most basic level, urban upgrading involves improving the physical environment of slums. This includes improving and/or installing basic infrastructure like water, sanitation, waste collection, access roads and footpaths, storm drainage, lighting, public telephones, etc. Upgrading also deals with regularizing security of land tenure and housing improvements, as well as improving access to social support programs (e.g., health, education) and municipal services (e.g., water, sanitation, waste collection, storm drainage, street lighting, paved footpaths, roads for emergency access).
The World Bank has been involved in a large number of urban upgrading projects over the last 25 years, demonstrating that basic services to slums can be provided at a realistic cost if done right. Our experiences have shown that upgrading can be affordable, that low income residents are willing to pay, that the poor can be good clients, that political commitment is key, and that fully involving the community in the process is essential.
Slums are the products of failed policies, bad governance, corruption, inappropriate regulation, dysfunctional land markets, unresponsive financial systems, and a fundamental lack of political will. Upgrading of existing slum and squatter settlements addresses the backlog of urban neglect, but many cities, especially in Africa and Asia, will face an onslaught of new urban residents over the next several decades, many of whom will be poor. Without significant improvements in the legal, regulatory, and financial systems, the problem of current slum and squatter settlements is only a glimpse of the future.
Poor or biased policies with regard to land are enormous obstacles in the path of the poor in their search of a place to live. To prevent the creation of new slums, changes are needed in the legal and regulatory framework, particularly with regard to land markets and land acquisition, including land registry, land valuation, and legal instruments to facilitate land acquisition. The poor often do not have the financial resources to buy houses. Reviewing the housing finance system, including the access of the poor to credit and targeted subsidies for housing, could also create opportunities for the poor.
The general institutional framework for providing access to housing and land for the poor could also be greatly improved to prevent the creations of slums. The government can play a stronger facilitating role for access by the poor to services through, for example, providing land-use planning with the poor in mind, or creating linkages with other housing and shelter providers. Non-government organizations have a specific role to play in being an intermediary between the poor and providers of housing and/or other services. The private sector, too, can have a significant impact by partnering with the government in provision of some services and low-income housing (for example, by taking advantage of government subsidy programs).