Global Perspectives on Informal Settlements Affordable Housing and Housing Finance Conference New Delhi, January 27, 2010 Global Perspectives on Informal Settlements Richard Clifford, Ivo Imparato & André Herzog The World Bank Group

Port-au-Prince, Haiti URGENCE TO ADDRESS A GLOBAL CRISIS URGENCY TO RESPOND TO A GLOBAL CRISIS The recent events in Haiti is a powerful message to the international community, policy makers, and urban practitioners of the urgency to scale up efforts on a unprecedented way. With an estimated 150,000 deaths, the urban poor living already on inhumane conditions paid the heaviest price. With 70% of Hiati’s urban population living in slums, poorly constructed homes are less likely to remain standing after a disaster On top of that, the poor have fewer means to rebuild after a disaster or to provide for their families after they’ve lost everything T he unfortunate lesson from Haiti is that those living in the poor conditions of slums are more vulnerable to disaster. This is a lesson that can be applied to many other place in the world. Background of Bank’s involvement in Haiti: A Bank funded project called the Urban Community-Driven Development Project (PRODEPUR) was approved in spring of 2008 in Haiti. $15.7 million IDA grant. The projects main component is slum upgrading providing basic and social infrastructure and services and creating income generating opportunities for poor urban residents. Since January 2005, IDA has provided a total of US$308 million for Haiti. In addition, trust funds administered by the World Bank have given more than US$55 million since 2003. Port-au-Prince, Haiti

Urbanization and slum growth 9 Population Rural 8 Total Population Urban Slums 7 Urban Other 6 Urban Population 5 World Population in Billions 4 3 FACING A GLOBAL CHALLANGE: URBANIZATION IS EXPONENTIAL, AND MOST OF IT IS SLUM GROWTH The world’s population growth is practically all urban in the 21st century. Most of urban growth takes place in developing countries, and it is actually slum growth. The UN estimates that 1 billion people live in urban slums – one out of every six human beings on our planet, and a third of the world’s urban population. If present trends continue, by the year 2030 this number may increase to 2 billion, and to over 3 billion in 2050. By 2050, urban slum dwellers would be more than a third of the world’s population: more people would live in slums than in the formal, serviced areas of cities. 2 1 1800 1850 1900 1950 2000 2050 Source: ONU-Habitat

Poverty is urbanizing Urban Share of Total Poor ($2/day poverty line) Percent 50 30 40 20 10 EAP ECA LAC SAR MNA SSA 60 1993 1996 1999 2002 POVERTY IS URBANIZING The percentage of poor people who live in cities is increasing overall and in almost every world region (notable exception is ECA). The consequence is what this graph shows: poverty is urbanizing. Approximately 1/3 of the world’s urban residents are living on under $2 a day. This is the same percentage of city dwellers who live in slums. As cities grow, so does the number of urban poor. Source: Ravallion, Chen, and Sangraula, 2008 and World Bank World Development Indicators 4

Africa: 62% of urban residents in slums Nairobi, Kenya South Asia and Africa are the world regions with the biggest slum populations. They are also the most rapidly urbanizing regions. According to the UN, 62% of all urban residents in Sub-Saharan Africa live in slums. Slum dwellers live in inadequate housing with deficient basic services such as access roads, drinking water, a toilet, garbage collection, electricity, storm drainage. They are exposed to a number of disaster, health, and environmental risks. Africa: 62% of urban residents in slums

Access to sanitation in cities Percentage 75 100 50 25 EAP ECA LAC SAR MNA SSA URBANIZATION AND ACCESS TO SANITATION Access to sanitation is the litmus test of how good access to services is in a country. Sanitation is more complex and expensive to install, and it generally lags behind. The graph shows that South Asia and Sub-Saharan Africa, the world’s most rapidly urbanizing regions, are also the ones where basic service coverage in cities lags. Share of urban population with access to improved sanitation(%) Source: World Development Indicators, 2008

*****MOVIE BEGINS NOW*****( Kibera, Kenya KIBERA, NAIROBI, KENYA Let’s now see what all these figures mean in practice, in people’s daily lives. Kibera, in Nairobi, is Africa’s largest slum. Nobody knows for sure how many people live in Kibera: estimates range from 600,000 to 1 million. Kibera epitomizes the plight of slum dwellers everywhere. Inadequate housing without basic services such as access roads, clean water, a toilet, garbage collection, and electricity. Residents are exposed to a number of disaster, health, and environmental risks. Let’s now walk through the alleys of Kibera with Carol Warimu, one of its residents. *****MOVIE BEGINS NOW*****( Africa’s largest slum in Nairobi, Kenya

BAD POLICIES MAKE THINGS WORSE BUT, Bad policies makes things even worse

OVERVIEW OF FAILED POLICIES The Rural Bias The Policy of Doing-Nothing Failure of Forced Eviction and Relocation The Affordability Trap OVERVIEW OF FAILED POLICIES Slums are the physical manifestation of overlapping forces: successful labor markets in cities and failed urban policies. Growth in industries and services creates demand for labor, which attracts people to cities. People take advantage of spatially concentrated employment opportunities, and businesses take advantage of their location in dense areas BUT Misunderstandings about urbanization have lead to failed policies that only made the situation of the urban poor even worse The fast urbanization combined with unrealistic regulatory frameworks, ill-conceived land policies, inadequate urban planning and weak institutional capacity creates institutional traps for the urban poor The “Rural Bias”: slums should be cleared as the poor are better off in rural areas than in slums, so their migration to urban areas can and should be stopped. Upgrading slums will attract more migrants and squatters; giving slum residents secure tenure will encourage even more to move to cities. The “Policy of Doing Nothing”: slums will consolidate naturally into the formal city without tackling key policy issues The “Failure of Force Eviction and Relocation Policies”: Clearing slum residents and/or relocating to housing projects on the outskirts of the city will solve the problem of informal urban development The “Affordability Trap”: The poor cannot and will not pay for housing and services.

Eviction “Every year 5 million people suffer this cruel fate” THE FAILURE OF FORCED EVICTION AND RELOCATION POLICIES Slum clearance through violent forced evictions and large scale slum demolition, without the offering of any alternative or choice to the populations displaced, has been a widespread practice. Slum dwellers, who have struggled to survive in the most difficult of circumstances, suddenly find the culmination of their efforts and the physical manifestation of their will to survive, destroyed in the most brutal way. Besides dealing a devastating blow to their economic and social assets, slum demolition is an extremely powerful psychological blow to their spirit Ultimately, force eviction will not deter continue slum formation if the institutional traps are not dealt with “Every year 5 million people suffer this cruel fate” - Center on Housing Rights and Evictions (Switzerland)

“Operation Murambatsvina” - Zimbabwe After Before AN EGREGIOUS EXAMPLE FROM AFRICA In May 2005, in what was called ‘Operation Murambatsvina,’ the Zimbabwean government destroyed homes, businesses and street vending sites in cities across the country. The official UN fact-finding mission reported that about 700,000 people have lost either their homes or their livelihoods, or both. In total, about 2.4 million people were affected to varying degrees. Due to the demolitions, serious HIV patients have been left without healthcare, students without education, and the displaced without food, water, sanitation or shelter. Women and children suffer the most from such evictions. “Operation Murambatsvina” - Zimbabwe May 2005

A lack of viable alternatives Alagados, Bahia, Brazil UNREALISTIC URBAN PLANNING NORMS Let’s look at the case of Brazil, a relatively wealthy country that has over 12 million households, 30% of its urban population, living in slums. Bank housing studies showed that more than 600,000 new urban households formed each year in Brazil have no housing option but the informal sector. This is due in large part to Brazil’s unrealistic standards for land subdivision, which severely constrain the supply of affordable serviced land. People are forced to double up, densify an existing informal unit, buy an informal lot, or squat. Slums in Brazil result from a combination of demographic pressure and market failures: and they grow at the rate of 600,000 new units a year. A lack of viable alternatives

*****MOVIE BEGINS NOW**** Alagados, Bahia, Brazil ALAGADOS, BAHIA, BRAZIL Alagados, one of the world’s largest slums on water, is an extreme example of the forces pushing millions of Brazilians into informal housing. The World Bank has financed a major slum upgrading project in Alagados, in partnership with the state government, the government of Italy, the Cities Alliance, and the NGO AVSI. The project has moved most of the stilt shack families to dry land nearby; the remainder will be moved soon. In the video we are about to see, you will hear the story of Zenilda, one of the Alagados residents who have benefited from the upgrading project. *****MOVIE BEGINS NOW**** One of the world’s largest slums on water

We have learned many lessons In its slum upgrading/tenure regularization work dating back to the 1970s, the Bank has learned many lessons Slums are also part of the solution as we will see in the coming slides Long-term engagement: multi-year citywide programs rather than isolated projects. Commitment needs to be multi-year and on-budget. No one-size-fits-all: knowledge of local reality is key to success. Resident participation key to impact and sustainability. Knowledge of actual demand is key: cities need to be able to map their informal settlements and track their evolution. Tenure regularization should not be made a pre-condition of upgrading. Rather, it is upgrading which often provides a good enough level of tenure security.

Bangkok, Thailand Ingenuity in the face of hardship BANGKOK, THAILAND SLUM RESIDENTS ARE RESOURCEFUL AND SELF-RELIANT This sequence from Bangkok illustrates the resilience and ingenuity of slum dwellers in the face of hardship. Be patient... Just watch what happens when the train goes by. *****MOVIE BEGINS NOW**** Ingenuity in the face of hardship

World Bank Urban Financing 12 2005-2009 10 8 $ Billions 6 1990-1994 1995-1999 4 WORLD BANK URBAN FINANCING Pro-poor approaches are at the core of the Bank’s urban strategy. After 15 years of decline, the Bank’s urban financing has increased greatly in the last five years. Slum upgrading financing is on the rise since 1995. This mirrors demand from governments, which invest much more on their own. The trend is positive, but these figures are still small compared to the size of the need. ADDITIONAL NOTES When costs are spread over 20 years, upgrading programs could provide services to all the urban poor in a country for as little as 0.2 to 0.5 percent of GDP per year. In other words, financial affordability is not the main constraint to delivering basic services to a country’s urban population.. In the past, narrowly-focused neighborhood level slum upgrading interventions, while generally effective, have fallen well short of addressing the magnitude and scope of expanding informality and slums. Other Urban Projects Urban Poverty & Slum Upgrading 2000-2004 2 16

Bahia Urban Development Project Impact THE NEED FOR A LONG-TERM COMMITMENT Slum upgrading requires long-term engagement. Do you remember the video we saw earlier of Zenilda, in the Alagados of Bahia? This is where she lived (can point to shacks on the water in left-hand image). The Bank has been engaged in this project in the State of Bahia for over a decade to improve access to infrastructure and housing conditions for 35,000 households, moving stilt shack dwellers to simple structures on dry land. The project provided daycare centers and other social services, while also providing access roads links, storm drainage, water and sanitation, healthcare, green areas and parks. Commitment needs to be multi-year and on-budget

Mauritania Urban Development Program PARTICIPATION IS KEY TO IMPACT AND SUSTAINABILITY In this photo, slum residents participate in a meeting with government officials to discuss the design of the project in their area. Resident participation is an important factor. In all of the projects we’ve discussed, partnering with the residents has been the key to success. In this Bank-assisted project in Mauritania, the government worked with communities to improve basic living conditions of approximately 540,000 people across the country in urban or village areas. Resident participation is key to impact and sustainability

Dar es Salaam Community Infrastructure Project THERE IS NO ONE-SIZE-FITS-ALL IN SLUM UPGRADING Each Bank-financed project is customized to the situation on the ground. Knowledge of local reality is key to success. Slum upgrading projects usually have a variety of components. In Dar es Salaam, a Bank-assisted project offered communities to choose from a fixed menu of improvements including roads, footpaths, drains, street lighting and public toilets. Each community’s project package varied depending on community priorities. No one-size-fits-all: knowledge of local reality is essential

Resources for further learning World Bank Urban and Local Government Unit www.worldbank.org/urban World Bank Institute Slum Upgrading Sourcebook www.wbi.worldbank.org Cities Alliance www.citiesalliance.org UN-HABITAT www.unhabitat.org Slum/Shack Dwellers International www.sdinet.co.za WHERE CAN YOU FIND MORE INFORMATION? World Bank Urban and Local Government Unit website (where you will find the Bank’s new Urban Strategy) WBI’s Slum Upgrading Sourcebook (highly recommended) Cities Alliance, a multi-donor global program promoting pro-poor urban policies (which has many interesting publications) UN-Habitat, the United Nations Human Settlements Program, which keeps worldwide slum statistics also has many interesting publications Slum/Shack Dwellers International (the organization headed by Jockin Arputham, whom we just saw in the video)

Thank you!