In rapidly growing cities, most additions to the housing stock are made outside any plan or officially approved housing project. They are largely built by the people themselves, since there is no other way they can get a house. Many houses or shacks are technically 'illegal', that is, they do not meet official standards and are usually built on illegally occupied or subdivided land because most city dwellers cannot afford to rent or buy a house, room or housing plot. In small towns and rural areas, acquiring a plot on which to build is usually less of a problem and people manage the construction of their own house, still often building most or all of it themselves.
While people can manage their own housing construction more cheaply and efficiently than any government agency, they have difficulty obtaining certain key resources. In cities, perhaps the most difficult resource to get is a legal housing plot on which to build. In all settlements, people need water, sanitation, garbage removal and roads, footpaths, electricity and basic social services. They may also need technical advice and small loans. These necessities are too short supply and their cost is far too high: it is here that policymakers need to focus their attention.
The task confronting policymakers is not to envisage large publicly funded house construction programmes — in the past, such programmes have failed to solve the poor's housing problems. The cost of each unit so produced is too high for the low income majority. If subsidies are given so the poor can afford them, few houses can be built and those that are constructed rarely go to those most in need. If the houses are not subdivided, then they are too expensive for all but the rich.
Human settlements research shows that the true architects, builders and planners of Third World settlements are the people themselves. The UN estimated that in 1970, four out of every five households in the developing countries lived in low-quality accommodation in the rural areas and urban slums. The period 1970-80 witnessed a further deterioration, with their numbers increasing 14%. Nor were ancillary services more adequate in terms of needs. It was estimated that around 1980, less than 50% of rural population of the developing world had access to safe drinking water, while nine out of ten rural households lacked any form of waste disposal facilities, while only 4% of all rural households in Africa and 15% in Asia had access to electric supply. International recognition of the gravity of the problem is evidenced by the declaration of 1987 as the "International Year of Shelter for the Homeless" and the inauguration of the "International Drinking Water Supply and Sanitation Decade".
The strategies, levels of investment and types of technology hitherto adopted are incapable of meeting the basic needs of shelter and ancillary services in the rural areas, given the high growth rates of rural population.