Slum upgrading gets sold as a feel-good charity pitch: pave the roads, run the pipes, hand out paint, everybody wins. That is not what it is. At its core, upgrading is a fight over land — who gets to stay on it, who owns it on paper, and who collects the profit when the value spikes. The infrastructure is just the part they put on the poster.
Here is what actually happens when an informal settlement gets upgraded, why some projects lift people up and others quietly become eviction with better branding, and how residents game the system to stay put.
What Upgrading Actually Means
Two completely different things get the same label, and confusing them is how people get burned.
- In-situ upgrading — improve the settlement where people already live. Nobody moves. Residents usually want this.
- Relocation or resettlement — move people somewhere else, often far from jobs and networks. Planners usually prefer this, because greenfield land is easier to build on and easier to finance.
Almost every real project bundles some combination of four things:
- Tenure — some recognized legal claim to the land
- Infrastructure — water, sewer, drainage, power, roads, street lighting
- Housing — repair, rebuild, or incremental core units that residents finish themselves
- Services — schools, clinics, waste pickup, public space
Skip the tenure piece and everything else is decoration. You can install the world’s nicest drainage and still lose your house next year if you cannot prove you were supposed to be there.
The Strategy Menu, and What Each One Really Does
In-situ upgrading
Cheapest per household, least disruptive, best outcomes on paper. The catch is political: it requires the government to publicly admit the settlement is permanent. That is an expensive thing to say out loud. So it often gets approved quietly, under a different name, with no ribbon cutting.
Land titling and regularization
Hand out deeds, or at least a long-term lease. This is the single most powerful intervention — and the most controversial. The uncomfortable part: titling converts housing into a saleable asset. It can be mortgaged, and therefore lost. In several documented cases, original residents were largely gone within a decade, replaced by buyers with better credit and formal jobs. Titling protects the households that stay. It also creates the market that pushes the rest out.
Sites-and-services
Government provides a serviced plot with a water connection and a legal address; the family builds over years. Works great when the site is near existing work. Fails hard when the plots are on the far edge of the city and the household income depends on being central. You saved the family a plot and cost them their livelihood.
Core housing and incremental build
Deliver a foundation, a wet wall, one finished room, and — critically — a legal framework that lets people add floors and rooms without a permit nightmare. This is how most housing in most cities actually gets built anyway. Formalizing it is cheaper than building apartments.
Relocation
Almost always packaged as upgrading. Usually it is really about freeing high-value land. Even when the new unit is objectively better construction, net household income often drops because commute costs eat the difference. Measure the travel time, not the wall thickness.
The Part Nobody Puts in the Brochure
- Upgrading raises land value, and taxes follow. The moment the pipes arrive, the assessment goes up. Households with rising costs and flat income get squeezed out of the place you just improved.
- Titling is a dispossession machine when it is done alone. Deeds without rental protections, without credit access for the poor, and without limits on speculation just hand the neighborhood to whoever has cash.
- Upgrading is sometimes a rebrand of clearance. The word gets attached to projects whose actual outcome is demolition. Read the resettlement clause, not the press release.
- Intermediaries capture the budget. By the time money moves through national agencies, city departments, contractors, and subcontractors, what reaches the site is a fraction of what was announced.
- Nobody funds maintenance. Build a water system, then discover there is no line item to repair the pump in year three. This is the single most common way upgraded infrastructure dies.
- The statistics get gamed. A household is counted as served if a pipe runs past the door, whether or not water comes out. Projects get declared complete, and the numbers get archived.
How the Money Actually Moves
Follow the funding and the strategy makes more sense.
- Concessional loans to national governments, on-lent to cities — which means the city carries debt and needs revenue to repay it
- Municipal borrowing against future tax income
- Cross-subsidy — sell a handful of market-rate plots or units to pay for the subsidized ones
- Land value capture — tax the uplift that infrastructure creates, instead of letting private owners pocket it
- Community savings pools and small-scale credit
- Remittances — family money sent from abroad, which in practice funds a huge share of housing improvements and never appears in any project document
The pattern: almost none of these pay for operations. Everyone wants to fund a ribbon cutting. Nobody wants to fund a pump repair in year five.
How Residents Quietly Work Around the System
This is the part that gets left out of the reports. People in these settlements are not passively waiting for a project. They are running plays.
- Count yourselves before someone else does. Community-led enumeration — residents mapping every household, name, and structure — creates a record that is hard to erase. It also creates a list of voters and a negotiating bloc.
- Use savings groups as collateral. Where banks will not lend, rotating savings pools and group guarantees fund incremental construction. The group knows who will repay better than any credit score does.
- Document everything, forever. Utility receipts, tax payments, dated photos, school enrollment records, anything with an address and a date. When a claim is disputed, proof of continuous occupancy is the whole case.
- Negotiate collectively, never individually. One household taking a cash offer is a rounding error. Three hundred households holding out changes the project budget.
- Get informal service providers legalized. The private water vendors, waste collectors, and electricity resellers already run the neighborhood. Bringing them into the formal system preserves livelihoods and improves quality at the same time.
- Occupy in stages and build visibly. Foundations get laid, walls go up, roofs go on — a permanent structure is harder to argue against than an empty plot.
- Buy out absentee owners early. Tracking down the person holding a paper claim on land they never visit, and settling it privately, kills a lot of future disputes.
What Real Impact Looks Like
When upgrading works, the results are measurable and fast:
- Tenure security — the single strongest predictor of whether a household invests in its own home
- Water and sanitation — diarrheal disease falls quickly and steeply once clean water and sewage arrive
- Child outcomes — school attendance and survival rates climb, especially where cooking fuel and indoor air quality also improve
- Time and money — piped water kills the vendor markup and frees hours per day, mostly for women and girls
- Asset and income growth — property values and small business activity rise, provided people are not displaced by their own improvement
The caveats are real though. Evaluations suffer from selection bias — the settlements that get upgraded are often the ones already better organized, closer to services, or more politically useful. And displacement has a nasty habit of scattering the problem instead of solving it. If ten thousand people move out and ten thousand move into the next unserved settlement, the headline number looks great and nothing changed.
The Patterns That Separate Working Projects from Photo Ops
- Residents hold actual decision power, not advisory seats that get ignored.
- Tenure comes first, concrete second. Security before construction.
- Location beats construction quality. A modest home near work outperforms a good home far away.
- Maintenance is funded on day one, not hoped for later.
- Phasing is incremental, so people are not displaced while waiting for the full build-out.
- Existing informal economies are protected, not bulldozed to make room for formal shops the residents cannot afford.
- Standards get relaxed on purpose. Insisting on suburban building codes in a dense settlement prices everyone out. Flexible standards are not a compromise; they are the strategy.
Bottom Line
Urban slum upgrading is not a construction problem. It is a land and power problem wearing a construction costume. The engineering is mostly solved — water flows downhill, drains go to the low point, power comes off a pole. What is not solved is who gets to stay when the neighborhood becomes desirable.
Projects that treat residents as owners — with recognized claims, real bargaining power, and the right to stay — tend to work and keep working. Projects that treat them as beneficiaries to be relocated, counted, and photographed tend to look great in a report and evaporate within a decade. If you want to know which one you are looking at, ignore the renderings and find the tenure clause. That is where the real answer is.