Financing Urban Shelter: Global Report on Human Settlements 2005 examines the challenges of financing urban shelter development, focusing on the shelter needs of the poor and within the overall context of the United Nations Millennium Development target on slums. Recent estimates indicate that more than 2 billion people will be added to the number of urban dwellers in developing countries over the next 25 years. If adequate financial resources are not invested in the development of urban shelter and requisite services, this additional population will also be trapped in urban poverty, deplorable housing conditions, poor health, and low productivity, thus further compounding the enormous slum challenge that exists today.

In many developing countries, it is unlikely that conventional sources of funds will be available for investment on the scale needed to meet the projected demand for urban infrastructure and housing. Most poorly performing countries continue to face deficits in public budgets and weak financial sectors, and the contribution of official development assistance to the shelter sector is generally insignificant. While city authorities have started to seek finance in national and global markets, this practice is only in its infancy. The report concludes that countries and cities will have to rely mainly on the savings of their citizens.