Q. 3. What financing mechanisms are needed to support efforts to both improve physical conditions in informal settlements & stimulate local economic activities?

March 24, 2017

This discussion is now closed. Thank you for your participation.


  • Claudio Torres Slum Upgrading Consultant, Housing and Slum Upgrading Branch. UN-Habitat
  • Pireh Otieno Human Settlements Officer, Urban Basic Services Branch - UN-Habitat
  • Kulwant Singh Regional Advisor - UN-Habitat
  • Marcus Mayr Urban Planner, Climate Change Planning Unit, UN-Habitat
  • Edmundo Werna Head of Unit at Sectoral Policies Dept. ILO

Q. 3. What financing mechanisms are needed to support efforts to both improve physical conditions in informal settlements & stimulate local economic activities?

Question 3: What are the financing mechanisms required to support efforts to both improve the physical conditions in informal settlements and stimulate the local economic activities such as those undertaken in the informal economy?

Please share your ideas and/or examples below.

Instituto Estatal de Urbannsmo
Thu, April 14, 2016 at 03.26 am

Instituto Estatal de Urbanismo A.C.

Enrique Urueta Gándara Urbanista

De todos nosotros es conocido que el querer crear a estas alturas una ciudad sostenible es una tarea titánica, pero la teneos que intentar porque nuestra obligación es el remediar la serie de problemas que creamos por falta de prevención, la cual va muy ligada a las necesidades culturales, sociales, y económicas de los países, que la mayoría de las veces se tienen que apegar a las exigencias de la inversiones, tanto nacionales como extranjeras, mismas que siempre van ligadas a ganancias máximas a pesar de el deterioro que sufran estas, y aquí me permitiré poner como ejemplo la ciudad de Detroit, que cayo en un vacío que no tiene comparación en ninguna parte de el mundo, y este fue creado bajo la tónica, que el producir los automóviles fuera de esta ciudad es más económico y tienen toda la razón si solo nos fijamos en ganancias de el inversionista, sin tomar en cuenta la cantidad de daños colaterales que causamos con esta actitud y si solo importan las ganancias, menos va a importar el hacerle daño al medio ambiente, destruir el tejido social, si surgen gettos ect., y si no tomamos en cuenta todos los elementos que son importantes para que existan las ciudades sostenibles, seguiremos cayendo en una irresponsabilidad que puede catalogarse hasta de criminal, porque no somos capaces de pensar en lo que estamos heredando a nuestros hijos, pondré otro caso que me llama mucho la atención y que considero es altamente ilustrativo, de el porque de la calidad de nuestras ciudades, en primer lugar recordare lo que nos dice Scott,(urbanista Ingles) lo malo de la planeación moderna es que las nuevas catedrales son los Shopping center. Y nombrare a otro urbanista que es de nacionalidad Argentina , y que a mi manera de ver resume el error de haber abrazado su nación con tanto fervor, la doctrina de el neoliberalismo, y en esta frase resume todo el daño que se le hizo a la ciudad de Buenos Aires: Buenos Aires tiene una trialectica original y patética, ya que tenemos la grandeza europea, los errores de Norteamérica, y las necesidades de America Latina.

Mariangela Veronesi Programme Manager, Building and Social Housing Foundation from United Kingdom
Sun, April 3, 2016 at 03.01 pm
I believe the CLIFF programme, coordinated and partly funded by UK based organisation Reall (formerly known as Homeless International; https://reall.net/) – has a lot of lessons to share in terms of financing the upgrading of informal settlements
CLIFF stands for Community-Led Infrastructure Finance Facility. It defines its core work as, ‘to support slum dwellers to improve their lives and find lasting solutions to urban poverty’. CLIFF aims to address housing and basic services of slum dwellers, which are not adequately addressed by the local government or private sector. 
It provides affordable finance to its Implementing Partners. Reall then work with these organisations to develop financially viable housing projects for their low-income communities. The long-term ambition of CLIFF is to help the projects achieve significant scale. It does this through: 
  • Using the projects as demonstration projects. 
  • Reducing the risk of investment in housing for low-income people. 
  • Unlocking large-scale, private investment for future CLIFF projects.
CLIFF’s approach is to develop self-reliant housing projects that are capable of creating sustainable settlements, shelter and services. This is delivered through a long-term partnership approach with Implementing Partners, funding partners, and technical partners. Reall play a strategic management and coordination role in this process. 
CLIFF provides capacity grants and revolving capital funds to the Implementing Partners. The Implementing Partners use the revolving funds to offer loans and to make strategic investments, such as the purchasing of land.

CLIFF starts from the philosophy that the poor are worthy of investment. Instead of giving one-off grants, CLIFF helps establish organisations in Asia and Africa with the capacity to provide slum dwellers with access to affordable housing finance. This approach not only facilitates the construction of affordable homes and neighbourhoods, it also generates enough financial return to allow the organisations it funds to achieve financial sustainability. In Nepal, this approach has enabled CLIFF investment to act as venture capital, proving the viability of projects that then achieve investment from established banks and lenders. CLIFF operated in fourteen countries, CLIFF has supported more than 70 housing and infrastructure projects in Asia and Africa between 2010 and 2014.

More information here: https://worldhabitatawards.org/winners-and-finalists/project-details.cfm?lang=00&theProjectID=3E57BAFE-D4AE-52C7-70492DF993F97409

[Reall has recently been shifting in their approach to financing housing and upgrading projects in informal settlements, and it will be very interesting to follwo how this evolves and what the results from this are.]

Another interesting programme in terms of funding streams is the Asian Coatition for Community Action (ACCA) programme by ACHR https://www.achr.net/activities-acca.php which has supported groups in over 165 cities is 19 countries in financing community-led initiatives for citywide upgrading. Through this they aim to create significant number of precedents and models of community-driven citywide upgrading to start influencing policy and make these initiatives shift from less known, unusual projects to more mainstream, well-recognised practices.

Nelson Mandela Metropolitan University
Fri, April 1, 2016 at 02.46 pm

The financing model for improving the quality of life of people living in informal settlements combines

A. public sector investment on infrastructure development, livelihoods programmes and capacity building and community empowerment

B. corporate social investment by the private sector

C. philanthropic assistance or donor aid during disasters and other life threatening situations

D. community income generation (informal economy, stokvels, savings clubs).

WWhat needs to be improved is the coordination of the different funding streams so that such investments can realise the intended impact.  The general practice of various entities parachunting intervention programmes for own outcomes have not yielded the intended results. These programmes would arrive in these spaces in different times, thus losing an opportunity that comes with coordinated interventions. 

The financing model shold be realistic on what is achievable within a particular time period. Where permanent infrastructure solutions cannot be realised, interim basic services should be provided. The provision of interim basic services should consider the operational and maintenance costs. More so, the temporary services should provide a progression of the community from a state of indignity to some measure of dignity. 

Neighbourhood Development Visions should guide the financing of development interventions. Neighbourhood Development Trusts, similar to Rural / Village Development Trusts, sshould be established or recognised for coordination purposes. These trusts put the interests of communities before everything. 

Luis Bonilla Director
Tue, March 29, 2016 at 09.25 pm

Hello everyone! To contribute to the debate, here I share the contribution of TECHO (www.techo.org) based on our experience working in Latin America with houndreds of communities of informal settelments:

Latin America is the most unequal region in the world and most urbanized region of the global south. This reality has serious consequences on fragmentation, segregation and social exclusion. We do not live in a poor region but in unjust societies. Currently, 113 million people, a quarter of the urban population live in informal settlements in the region.

In the countries of the global south, more than 50% of the habitat is build and produce by citizens. And in economic terms, it is mostly funded by the inhabitants themselves through household income and collective efforts. In order to promote the development of informal settlements, we believe that the financing of social production of habitat is a key element, because it recognizes the active rol of dwellers in the transformation of the community in particular and the city in general.

In the case of Latin American governments, it is necessary to emphasize their role in the distribution and redistribution of income and wealth. As well as the development of a countercyclical social policy with a universal and human rights approach. It is important strength the institutional framework with a focus on the right to land, housing, habitat and social function of property. Among others, incorporating various forms of ownership, by promoting community ownership, regulating private ownership and considering the participation of state-owned land. Also expanding and strengthening mechanisms of security of tenure of land and housing and redistribution policies such as value capture and / or sumptuary taxes on properties.

Funding should incorporate the promotion and / or expansion of participatory budgets at different levels of the public sector. Promoting the development of public spaces that combine co-management and self-management. Promoting the organization of housing cooperatives and habitat and of solidary community development. And also it must guarantee access to credit, promote savings and include coordination mechanisms between dwellers to improve production costs. On the other hand, it is essential to strengthen the economic capacity, facilitating the organization of more social process of work, production, distribution and exchange between people.

I also attach the declaration of the Global Platform for The Right to The City, realeased this month in wich you can find a proposal product of the articulation of a group of social organizations for financing the urban development.


Norman Mapela Principal representative Economic and Social Development Practitioner from South Africa
Sat, March 26, 2016 at 08.22 am

Use the SMMEs and Co-Operatives as intermediaries for finance

Juana Sotomayor – Discussion Moderator “””Human Rights Officer, Office of the High Commissioner for Human Rights””” from Switzerland
Thu, March 24, 2016 at 11.57 am

Hello everyone and welcome to the online discussion on Informal Settlements. I share Melissa and Claudio’s point that this is a great opportunity to hear ideas and inputs in preparation for Habitat III. In my view, a human rights perspective in the discussion is essential if we truly want to find ways of addressing the living conditions of the millions of women, men and children whose homes and communities are in informal settlements around the world, including those who are homelessness within settlements.

The vision of the 2030 Agenda for Sustainable Development – “No one left behind” can be a powerful call for equality and non-discrimination as core principles for this discussion. Since Habitat III will provide the unique opportunity to zoom in on what it means to “ensure access for all to adequate, safe and affordable housing and basic services” (target 11.1), the focus on informal settlements couldn’t be more timely or crucial.

Following the four thematic areas for this discussion, I would like to propose specific questions to kick start or feed into the overall conversation. When sharing your views and ideas, I encourage you all to consider the various roles that different stakeholders play in informal settlements, from governments at the national, subnational and local levels, to social movements and community organizations, to real estate and business, as well as donors and international organizations.

For TOPIC 3, my question is:

  1. What examples can be shared of effective mechanisms or positive experiences from informal settlements’ organizations in monitoring the allocation and use of available resources for the benefit of the population (e.g. better access to water, sanitation, electricity, health centres, roads or other essential services)?

Claudio Torres – Discussion Moderator/Policy & Outreach Advisor, Slum Upgrading Unit Housing & Slum Upgrading Brch, UN Habitat from Kenya
Wed, March 23, 2016 at 06.01 pm

Welcome everyone to the online discussion on Informal Settlements for the Habitat III Thematic Meeting in Pretoria. We are delighted to be moderating this discussion and looking forward to get your inputs and ideas in this critical topic for Habitat III and for the overall sustainable development of humankind. 

In particular, we are keen to know your thoughts and recommendations on how to address the dire challenge of informal settlements in a sustainable, inclusive and integrated manner, aiming at giving a viable response to this problem by 2030. Also, we would like to know your views on how informal settlement and slum upgrading could be effectively incorporated into the New Urban Agenda and help implement it.

To organise this dialogue’s inputs, we will follow the themes covered by the Habitat III Thematic Meeting’s plenary sessions, these being:

  1. From informal settlements to sustainable neighbourhoods – Policy and strategy frameworks for a paradigm shift;
  2. Urban planning and land use – Drivers for integrated, inclusive, safe and resilient sustainable human settlements;
  3. Financing informal settlement/slum upgrading – Contributing to sustainable livelihoods and inclusive economic growth;
  4. Together transforming a billion lives – Participatory approaches in planning, implementing and monitoring informal settlement/slum upgrading.

We will kick-off with a set of four related key questions, hoping to prompt everyone’s creativity and contribution. We invite you therefore to reflect on these topics and contribute with your valuable inputs.

Lastly, we would like to emphasize the need to focus on practical recommendations and feasible strategies that can be endorsed and implemented by all stakeholders involved in the commendable task of transforming the lives of the people living in slums, including slum dwellers themselves. With that, we would like to open the floor to your input on:

TOPIC 3: “Financing informal settlement/slum upgrading – Contributing to sustainable livelihoods and inclusive economic growth”: