This study of 1755 households in Nairobi’s slums challenges the conventional belief
that slums offer low-quality low-cost shelter to a population that cannot afford better standards. In
Nairobi, slums provide low-quality but high-cost shelter. Although slum residents pay millions of
dollars in rents annually, and better quality units command higher rents, very little is being re-invested
to upgrade quality. To resolve the challenge that the Nairobi puzzle poses for theory and
practice, we develop a new analytical framework for understanding quality of living conditions.
Improving conditions in Nairobi’s slums requires, we argue, two simultaneous interventions: alteration
of the tenure mix to enhance owner occupancy and infrastructure investment.