The purpose of this report is to specify the key constraints that must be addressed for significant reform in the urban sector to occur. It is meant to be an informational tool, one that helps development planners understand and confront the problems that beset projects striving to bring water and sanitation to the urban poor. This report does not attempt to offer recipes for overcoming the constraints affecting informal urban settlements, in which the greatest number of poor families reside, nor does it offer a general approach for raising awareness and problem solving. It is hoped instead that this document will help further clarify urban sector constraints in addressing the needs of the urban poor, and that it will lead to the development of additional activities to deal with these constraints, either in the context of individual projects, or in other sector wide initiatives.