The Challenge of the Urban Poor 1. Urban utilities often fail to provide service to low-income customers, those settled on illegal or low grade land, and those residing in transient communities. Investments in such communities are usually supply-driven. While the rural sector has recognized the power of demand-responsive approaches it is difficult to replicate these lessons in urban settings where individual demand must be aggregated and community demand balanced against the needs and constraints of the urban system .
Services also break down because of the low priority given to operational budgets.
Low-income consumers themselves may regard the utility with mistrust and be unwilling to cooperate. Low-income communities may be actively excluded from decision making and therefore see themselves as having no role as partners in service provision. The irony of the situation is that the poor do access services for which they often reliably pay a much higher rate than that demanded by the utility. The improvement of service provision to the urban poor will be driven by a combination of institutional and technological innovations which increase the participation of the community and decentralize elements of the system. The entry of alternative service providers into the market creates choice and options for householders.