At the low end of the scale, the changes may be most significant: There is a new market developing to serve 200 million households in slums in emerging markets.

A third of urban dwellers—1.6 billion people—could struggle to secure decent housing by 2025. Here are four approaches that could help. If current trends in urbanization and income growth persist, by 2025 the number of urban households that live in substandard housing—or are so financially stretched by housing costs that they forego other essentials, such as healthcare—could grow to 440 million, from 330 million.

In Pune, India, where the population density is seven times higher than in Manhattan, at 194,000 people per square kilometer, developers are building apartments between 396 and 794 square feet that sell for RS 10-25 Lakh, or $10,000–$25,000. Spurred by the government's push to make affordable housing a priority, a growing number of developers and private equity firms are entering the market, including Janaadhar Infrastructure and Poddar Developers. India has a shortage of 18 million urban housing units.