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		Upgrading is widely held to be most effective mechanism to expand the supply of housing for low-income groups and improve conditions for the urban poor. By providing the support infrastructure, it opens up opportunities for new economic activity. It also requires flexibility in approach to both overcome technical problems associated with working within existing urban settlements and to secure social acceptance within the community. (HUDC) should continue its involvement in the upgrading of existing slum and squatter areas. However this should be considered a decreasingly important sector of low cost housing demand, and HUDC should carefully evaluate commitments and the economies of scale of potential projects. Upgrading projects should be utilized to further develop the concept of community self-help involvement.