There is an acute lack of well-located urban housing that is adequate, secure, and affordable. The global affordable housing gap is currently estimated at 330 million urban households and is forecast to grow by more than 30 percent to 440 million households, or 1.6 billion people, by 2025. This paper defines three key challenges to providing adequate, secure, and affordable housing in the global South, the growth of informal or substandard settlements, the overemphasis on homeownership, and inappropriate policies or laws that push the poor out of the city.

The paper presents a new approach to analyzing housing options. It moves beyond the formal/informal, public/private, and individual/ collective dichotomies to consider a spectrum of options that combine different elements of ownership, space, services, and finance. The paper proposes three scalable approaches to addressing these challenges: adopting in situ participatory upgrading of informal settlements, promoting rental housing, and converting under-utilized urban land to affordable housing. Addressing the challenge of adequate, secure, and affordable housing within and around the city is essential to enhancing equity, economic productivity, and environmental sustainability of the city.