U.N. says two billion more people will live in cities by 2030

Governments must act aggressively to house two billion more people who will be living in cities in 25 years, according to estimates in a U.N. report released Monday.

Such an increase will stretch cities past their limits, straining water, sanitation and other infrastructure services and forcing many to live in slums, the U.N. Habitat report concluded.

To deal with the coming influx, the report said, 96,000 housing units must be built every day between now and 2030, amounting to 4,000 new units every hour.

Anna Tibaijuka, U.N. Habitat's executive director, said that without governments and others investing resources to solve the problem, "this additional population will be trapped in urban poverty, deplorable housing conditions, poor health and low activity."

Part of the problem, she said, is that people's incomes are often too low to afford good housing in cities.

In developed countries, homes can be as much as six times the average yearly salary, the report said, while the poor can face housing prices as high as 12 times their average annual salary.

Governments could help, Tibaijuka said, by encouraging small housing loans, opening mortgage markets to the poor and reducing the cost of materials needed to build homes.

Most urban poor can only build in stages, as money becomes available. So the report recommends that banks give loans of one to eight years, in amounts of $500 (Ђ406 to $5,000 (Ђ4,060), instead of bigger, long-term loans.

Banks could also help by taking into account a person's future income potential when considering housing loans, considering that the poor often add to their income by renting out rooms in their homes, the report said, AP reported.