Urban Challenges: Poverty, Deprivation and Housing

Why a wealthy city can still contain deprivation

A city’s economic success does not guarantee that all its residents can afford a suitable home or access essential services. Mumbai, in Maharashtra on India’s western coast, is a major financial and commercial centre in a newly industrialised country. Sydney, in Australia, is a global centre for finance, tourism and education in a high-income country. Both contain prosperous neighbourhoods alongside communities facing poverty and housing difficulties.

Poverty means lacking the financial resources to meet your needs. Deprivation is broader: people may lack adequate housing, healthcare, education, employment opportunities or a safe living environment. These problems often overlap. A household with a low income may struggle to pay for housing; poor housing and sanitation can then damage health, making earning a reliable income harder.

Reducing deprivation therefore involves more than building homes. The homes must be affordable, have essential services and allow residents to reach jobs and schools.

Mumbai: housing and services struggle to keep pace

Mumbai’s rapid population growth has increased demand for homes faster than affordable housing and services can be provided. Low-paid or insecure work leaves many households unable to afford formal housing. Around 40% of residents are estimated to live in informal settlements.

Dharavi shows how housing shortages and deprivation combine. It covers about 2.1 km² and accommodates a very large population in densely packed housing. Many residents lack reliable clean water and sanitation. Overcrowding, open drains and poor sanitation increase the risk of diseases such as cholera and typhoid.

This is not simply a shortage of buildings. A home without safe water, toilets or secure land rights does not provide the same protection as well-serviced, secure housing. Meanwhile, wealthier districts such as Bandra West have much better housing and access to private services. The contrast demonstrates inequality within the city, rather than poverty affecting everyone equally.

Improving Mumbai’s housing without destroying livelihoods

One approach is to upgrade existing communities. SPARC, the Society for the Promotion of Area Resource Centres, and Mahila Milan support residents through self-help schemes. They provide help such as small loans, training and building materials so households can improve homes and install services, including sanitation and electricity.

Upgrading can improve health and safety while retaining community networks and access to work. It also gives residents a role in decisions. However, limited funding makes progress slow and small-scale, while unclear land ownership can make improvements difficult. Such schemes help participating households but cannot quickly meet the whole city’s housing need.

A different approach is redevelopment. Mumbai’s Slum Rehabilitation Authority replaces informal housing with high-rise apartments. Well-serviced apartments can offer permanent housing with water, electricity and toilets, while denser development frees valuable land for other uses.

The benefits depend on who receives a home and where it is located. Some residents are excluded, and relocation can separate families from schools, jobs and support networks. Dharavi also contains small workshops and other informal businesses. A better apartment does not necessarily reduce poverty if moving makes it harder to earn a living.

The Mumbai Development Plan 2034 includes plans for one million affordable homes and land for schools, hospitals and open spaces. This recognises that housing must be supported by services. However, high land values, administrative delays and eligibility restrictions can limit access. Planned homes should not be treated as homes already delivered.

Overall, Mumbai needs both better-quality housing and protection of residents’ livelihoods. Upgrading can preserve communities, while redevelopment can provide more permanent homes. Neither approach is sufficient if the poorest households are excluded or population growth continues to outpace provision.

Sydney: good services do not make housing affordable

Sydney generally has more developed infrastructure and services than Mumbai, but its housing costs are a major challenge. High prices and rents can make suitable housing unaffordable for younger people and low-income households, even when homes have good sanitation and electricity.

There are also inequalities between neighbourhoods. Wealthy suburbs such as Mosman contrast with outer suburbs such as Mount Druitt, where incomes are lower and unemployment is higher. City-wide prosperity can therefore hide local deprivation.

Housing location matters as well as price. If cheaper housing is far from employment, households may face longer journeys and higher travel costs. Expansion into surrounding rural areas, known as urban sprawl, can increase car dependency. Housing provision needs to consider access to opportunities, not just the number of homes.

Can regeneration reduce Sydney’s housing challenge?

The Green Square Urban Renewal Project redevelops 278 hectares of former industrial land. Housing is combined with public spaces, cycle routes and other facilities. Mixed-use development brings homes and activities closer together, encouraging walking and reducing the need for lengthy journeys.

Regeneration can therefore improve the living environment as well as increase housing supply. However, property prices remain high and affordable housing is limited for low-income groups. An attractive new neighbourhood does not automatically benefit those with the greatest housing need.

Sydney’s affordable-housing initiatives include lower-cost homes for key workers such as teachers and nurses. These can help people remain within reach of employment. Their limitation is scale: providing some lower-cost homes does not remove the wider pressure of high housing costs.

Comparing the challenges and judging progress

Both cities face a mismatch between what households can afford and the housing available. In Mumbai, this is strongly associated with overcrowded informal housing and inadequate basic services. In Sydney, the central problem is often the affordability and location of otherwise well-serviced housing.

Success should therefore be judged by more than the appearance of a development or the number of buildings planned. Important questions are whether low-income residents gain secure, affordable homes, whether services improve and whether they can still reach work and education. Housing improvements reduce deprivation most effectively when they improve these opportunities together.

Poverty, deprivation and housing

• Poverty: insufficient financial resources.
• Deprivation: wider unmet needs, including housing, health, education and employment.
• More homes alone do not solve deprivation: affordability, services and access to jobs matter.

Mumbai — NIC city

• Rapid growth and low incomes contribute to housing shortages; around 40% of residents live in informal settlements.
• overcrowding and unreliable water and sanitation increase health risks.