Summaries The article describes how and why the scale of urban poverty in much of Africa, Asia and Latin America seems to have been underestimated, its nature misunderstood (or for political reasons, misrepresented) and the best means for reducing it rarely acted upon. It suggests that the income level needed to avoid poverty in most urban areas has been underestimated, largely because too little consideration is given to the cost of essential non‐food items. It also suggests that most low‐income groups in urban areas face a health burden from their housing whose physical, social and economic costs have been underestimated. This is because the only housing they can afford is of poor quality, usually too small in relation to household size, lacking in basic services and often built on a dangerous site. The article also outlines different measures through which urban poverty can be reduced. These measures include not only increasing incomes and enhancing assets for low‐income households, but also upholding their right to justice and legal protection and responding to their needs and priorities for adequate housing and basic services. The final section discusses the relative balance between action at national, city and community level, and the most appropriate form of intervention for any agency that seeks to support poverty reduction at a community level.