Financing shelter is an important component within development policy frameworks intended to secure environmental sustainability, economic prosperity, cultural diversity and social equality. Financing Urban Shelter: Global Report on Human Settlements 2005 examines recent shelter finance trends and driving forces. It also explores policies and strategies that hold the promise of making shelter development truly sustainable, in the process filling the gap between the two extreme outcomes of current shelter systems that are being witnessed today: affordable shelter that is inadequate, and adequate shelter that is unaffordable.

The Report observes the challenges of financing as urban shelter development and focuses on the shelter needs of the poor and within the overall context of the United Nations Millennium Development target on slums. An estimate shows that over 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,  housing conditions, poor health, and low productivity, thus further compounding the slum challenge that exists today. The report highlights the continuing and necessary contribution of the public sector by financing shelter for the urban poor, like many households, even in developed countries, cannot afford home-ownership or market rents.

Furthermore, national economic authorities have been preoccupied with macro stability, debt and trade and have tended to neglect implementation of needed policy and institutional reforms in the urban sector, with a few exceptions such as India, China, and richer developing countries such as the Republic of Korea, Thailand and Mexico.