This paper is a critical study of recent innovations in institution development for delivery of low income housing in Third World Cities. It is based on an evaluation of the Dandora Community Project in Nairobi, in the wider context of leading policies of international development agencies.

The Dandora Project was initiated as an experimental approach in low income housing, along with a number of similar sites and service projects in other African and Third World countries. An innovative feature of the Dandora pin the Nairobi City Council to implement this self-help project. The Housing Development Department (HDD) employed community development personnel to work with residents at neighborhood level.

The study analyses some of the pitfalls which bedeviled the HDD in the wider political and administrative environment. The significance of the Nairobi experience is generalized with reference to recent shifts which have become apparent in international funding agency priorities. The authors contend that the case study demonstrates that the community development approach supported by donors in the seventies benefits lower income households more than the private sector approach supported in the seventies.