Looking Ahead -- Opportunities for Fundamental Change

18 April 2018

Screen Shot 2018-04-18 at 11.51.23 AM

By Joel Bolnick, Robert M. Buckley, Sarah Colenbrander, Achilles Kallergis, Nancy MacPherson, Diana Mitlin, and David Satterthwaite

SDI has been inspired by the vision of socially and economically integrated slum settlements with security of tenure, universal access to affordable basic services, and adequate housing. To that end, SDI has demonstrated over many decades that constructive dialogue, collaborative data gathering, and knowledge sharing among informal settlements, communities, and local government authorities can contribute significantly to inclusive and sustainable urban development. Our societies face mounting global risk, characterized by profound inequality and rising wealth disparities, social instability, disruptive technological advancements, large-scale involuntary migration, and climate change. Many of these challenges are concentrated in cities.

Fundamental changes are needed to:

  • shift the approaches to urban development and informal settlements so that the poor are recognized as assets and partners, not problems;
  • support the essential partnerships required to deliver inclusive, resilient, and sustainable urban development;
  • reimagine data and information systems so they support shared knowledge, trust, and collective action;
  • develop innovative instruments and frameworks to monitor and report on poverty that shape more inclusive policies, programs, and investments.

✸ ✸ ✸

The successful realization of KYC in 103 cities and 1,238 settlements demonstrates the power and potential of an expanded KYC campaign. KYC is capable of reorienting the way that urban planning and development happens. It can guide local governments, national and international policies, and programs and investments at scale. As such, it can contribute significantly to managing the persistent social, economic, and political risks facing cities and nations.

A scaled-up KYC campaign presents opportunities for SDI and partners to transform existing urban development practice and policies by catalyzing new thinking and solutions in: monitoring for local action; advancing urban resilience and inclusion; redefining and managing risk; and securing new finance for the urban poor.

Monitoring That Enables Local Action

As noted in Rose Molokoane’s introduction, there is a need to move from talk to action. KYC has much to offer the SDG and city monitoring processes in moving to achieve inclusive, resilient, and sustainable urban development.

KYC profiling and enumeration processes provide the detailed information needed to reframe issues from a local perspective and identify practical solutions for informal settlements. The central role of slum dwellers in collecting and processing data ensures a focus on the poor and on operational knowledge for local actors working to implement global commitments.

Universal generalized indicators fail to capture the complex and locally specific conditions of slums. They therefore lead to policies and programs that do not respond to the most pressing needs of the urban poor, and can direct investments away from realistic and affordable improvements. Without accurate information and a deeper understanding of the needs and priorities of informal settlements, slum dwellers remain invisible, and efforts to reduce urban poverty and inequality will fail.

KYC fills a crucial gap in efforts to localize global development monitoring agendas in the following ways:

It generates operational local knowledge. A commitment to disaggregated, local data on the most vulnerable populations is essential to ensure we understand the reality of life for the majority of residents living in cities characterized by informality. It is staggering to see the exclusion of slum households and informal settlements in national censuses, household surveys, and other data that form the basis of poverty measures. Through their design, such surveys miss millions of poor individuals, particularly those residing in informal areas. KYC is designed to measure what matters to the urban poor and cities concerned with inclusive development.

KYC offers systematic, rich, contextual information across low-income neighborhoods in cities of the Global South. The information generated through KYC profiling and mapping is operational. It informs local action by clearly showing what the priorities, capacities, and preferences of slum dweller communities are, and how those preferences vary by local context, city, neighborhood, or  even household. This level of detail is necessary to realize pragmatic improvements, set appropriate standards, and create adequate solutions from the urban poor perspective.

It generates collaborative local action. KYC has tremendous potential to develop a shared understanding of local conditions and build the relationships needed for collective action by slum dwellers and local governments. It demonstrates the critical role that community groups play in framing problems, identifying issues, and addressing priorities. The power of KYC extends well beyond the data it produces and is transformative because it serves as a mechanism for communities to use this rich information to broaden understanding and accountability, both in horizontal relations (within a community) and vertically (among communities, the state, local governments, and the private sector).

Concrete examples of KYC’s potential are found wherever there are active SDI federations. The impact is strongest where KYC is embedded in national urban policy and programming. In the Cites Alliance–funded Country Programs, for example, the role of community profiling and mapping is a core element recognized by government, local partners, and international support agencies. In Uganda, Ghana, and Liberia in particular, SDI federation profiling data set baselines from which program achievements were measured, informed the development of city development strategies and urban policy, and grounded the identification, by communities, of priority slum upgrading projects funded by municipal Community Upgrading Funds.

To “leave no one behind,” we need better tools to measure change in the most vulnerable populations. For those seeking to convert information into action, KYC offers tremendous opportunity for monitoring progress toward global agendas and catalyzing dialogue and action at local, city, and national levels.

Advancing Urban Resilience and Inclusion

Inequality and climate change are two of the defining challenges of the contemporary era. Increasingly, developing cities find themselves at the very heart of these challenges. Over the past decade, the global development community and investors have seen promising results from investments that seek to build the resilient capacity of individuals, communities, and systems, including the most vulnerable. Significant conceptual, technical, and operational advances have been made using a resilience lens to reframe problems, solutions, and investments to respond better to incremental, chronic, and catastrophic shocks and stresses. The KYC campaign has been essential in advancing new ways of analyzing and understanding the role that informal settlements can play in achieving resilient and sustainable cities, reframing problems and solutions, and managing and mitigating risks. As a groundbreaking civic initiative for urban resilience, KYC offers unparalleled insights into the risks facing urban residents, as well as the means to transform relationships within settlements and cities in ways that tackle the driver of vulnerability: exclusion.

While investments in resilient, “smart,” sustainable, green, and livable cities have proliferated, many of these initiatives fail to address persistent poverty, exclusion, and lack of opportunity. Instead they often focus on technological fixes to infrastructure while remaining relatively silent on inclusion and equity.

SDI’s membership includes some of the most vulnerable populations in the world. These people frequently live in parts of the city that are exposed to hazards—for example, in low-lying coastal areas and floodplains, or on steep slopes. Environmental threats are exacerbated by the absence of risk-reducing infrastructure, such as water supply, sanitation, drains, and durable housing. As a result, slum dwellers bear the brunt of major disasters, while living with a range of everyday hazards that middle and high-income households are often able to avoid. By proactively engaging with initiatives designed to achieve resilient and sustainable cities, such as 100 Resilient Cities (100RC), and C40, SDI seeks to bring the urban poor to the center of strategy development and implementation.

As part of the 100RC effort, Durban, South Africa developed a city Resilience Strategy that identifies two critical priority areas for resilience building—one of which is, Collaborative Informal Settlement Action. This priority emerged from a highly participatory strategy development process driven by the city. Implementation of the strategy will be informed and monitored by “consolidated quantitative and qualitative community and municipal-collected data, information and knowledge on all informal settlements [that] is accessible to all and updated regularly.” Other 100RC cities are already looking to Durban for lessons on developing strategies that address informality. SDI federations in Accra, Nairobi, Lagos, Paynesville, and Cape Town are strategizing with their city government partners about how the KYC campaign can add value to the formulation and implementation of their resilience strategies. In partnership with the C40 Cities Climate Leadership Group and Inclusive Climate Action Program, SDI seeks to deepen the use of KYC by city mayors to make the case for inclusive climate action.

Redefining and Managing Risk

Much needs to be done to translate our understanding of the linkages between risks, human vulnerability, and poverty into robust risk management and investment strategies. Deepening inequality and poverty, compounded by the catastrophic effects of extreme weather events, violence, migration, and discrimination, have catalyzed new efforts to redress inadequate risk management strategies and instruments.

Over decades, SDI has implemented proven approaches to risk reduction through collective power, data, and savings. These strategies reduce everyday risks for urban poor families and help to secure assets, such as their homes. What is seldom taken into account is how these strategies also reduce the risk that voices of the urban poor will be silenced.

The KYC Campaign brings the power of community data and local Urban Poor Funds together in order to identify and reduce risks for the most vulnerable. This underpins collective efforts to negotiate and deliver community-managed public goods and services (tenure security, water, sanitation, drainage). Investments in these public goods address collectively experienced risks and help to strengthen awareness within the community of the significance of reducing and managing risk.

KYC also provides the basis for building relations that enable organized slum dwellers to challenge adverse political outcomes and reduce the risk of political exclusion. Politicians and officials appreciate the detailed information provided by KYC and recognize the potential of the organizations that produce this data. This makes them more likely to listen to SDI federations. In Namibia, for example, using the relationships enhanced by KYC, the Shack Dwellers Federation of Namibia successfully argued for inclusive upgrading solutions that now have the support of city and provincial government.

In the face of outmoded risk management instruments and strategies, innovators and early adopters in the urban field are experimenting with advancements in insurance products, credit rating systems, pro-poor safeguards in protocols for city investment, and the acquisition of risk-reducing assets through finance and social networks. SDI is also helping public and private partners to rethink the assumptions and processes that underpin decisions about banking systems, basic services, and municipal finance.

Innovation in New Finance for the Urban Poor

The United Nations estimates that it will cost almost USD $4 trillion a year to achieve the SDGs in developing countries alone, with an annual shortfall of an estimated USD $2.5 trillion. A significant portion of this funding is required for critical infrastructure to reduce urban vulnerability, but the share of public funds for these developments is diminishing. This realization, along with the emergence of impact investing and innovative finance, has spurred SDI to explore the potential for the urban poor of new experimental financing mechanisms including resilience bonds, social impact bonds, diaspora bonds, insurance-based instruments, crowd-funding, peer-to-peer lending, and outcome-based contracting.

Lessons from SDI’s experience in urban poor finance can help to inform and ground the design and innovation of these and other much-needed new financial strategies and instruments in the realities of informal settlements. The Urban Poor Fund International (UPFI) is a self-governed, self-managed, and expanding financial facility that provides capital to national Urban Poor Funds. These in turn provide low-cost loans and grants to savings collectives undertaking important urban improvement and housing projects. It puts capital directly into the hands of slum dwellers undertaking urban improvement schemes that they have negotiated with local and municipal government. Giving federations direct control of capital enables them to negotiate as an acknowledged potential partner with formal bodies such as governments, investors, and banks. These interventions have been anchored by the same local knowledge and partnerships that guide KYC and have thus produced practical interventions for affordable and scalable finance in support of the urban poor.

Climate-Compatible Informal Settlement Investments

In the face of new environmental threats (such as floods and sea level rise) investments must, to the extent possible, be designed in ways that support low-carbon development. There is far too little work done with respect to informal settlement upgrading in the context of climate change. Particularly among city governments and investors, few appreciate the extent to which good-quality upgrading could build resilience to climate risk. Throughout the SDI network, federations are building housing structures that are better able to withstand storms and floods; installing piped water supplies; making provisions for sanitation and drainage; constructing all-weather roads and paths that are resilient to extreme weather; and creating house and neighborhood designs that help populations cope with heat waves and flooding. In partnership with Global Infrastructure Basel (GIB), SDI seeks to increase investment in climate-friendly infrastructure in informal settlements by producing business cases guided by KYC data and SuRe® Standard sustainability and resilience assessments.

Risk is all about protecting the bottom line. In the case of slum upgrading in an increasingly dangerous environment, the bottom line is to change the political and economic climate. The first step is to recognize that risks associated with leaving millions of people behind will be equally shared, not borne only by those who can least afford to carry them. And to appreciate that including the urban poor in development plans will generate economic, social, and environmental benefits for all residents.


In February, SDI launched a landmark publication titled “Know Your City: Slum Dwellers Count,” showcasing the extraordinary contribution of the Know Your City (KYC) campaign to creating understanding and taking action to reduce urban poverty and exclusion. We are posting a new chapter from the book every week. Enjoy! 

Download the full publication here: http://bit.ly/2seRc0x