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An important determining force in urban development is economic. Development takes place with people's willingness and ability to pay-in monetary and non monetary terms- for housing accommodations, thus stimulating market forces to meet their demands. In developing economies however, a great percentage of population is marginal to economic development. The urban economy has been unable to expand and absorb the increasing surplus labor force. Nor has it been capa-ble of subsidizing low income groups housing demand. Within this urban context, the low income population strive to fulfill their housing needs and in this attempt generate "inefficiencies " in the urban structure. This thesis is concerned with the analysis and evaluation of selected urban dwelling environments in Metropolitan Mexico. It attempts to define low income housing econo-mic performance regarding the financial and real estate markets; and to identify the quality of "inefficiencies" regarding urban development. The need for enlightened urban development policies is emphasized. The study is based on empirical data and on a systematic analysis of the physical and economic characteristics of the present situation in low income housing