AbstractThis study analyses the programme impact of a strategic decision to privatize public housing development. It provides theoretical insights and assesses the ‘filtering’ (trickle down) theory of housing development underpinning this strategy. Analysis of distributional effects ensuing from the project demonstrates that developmental benefits (additional supply of housing) have simply filled the demand of those who can cater to the forces of the marketplace. Furthermore, macroeconomic determinants, acute shortages and distributional problems in the housing market that typically characterize urban centres in developing countries counteract that filtering process. The consequences of this privatization strategy point to potential costs and benefits of future policy opti