Abstract: Squatter housing problem being dispersed in Annaba city, situated in North-East of Algeria, is considered as the major constraint to the city spatial expansion. The disproportionality between population size and squatter houses expansion makes the situation very intricate, especiqlly on social, economic and environment aspects. After the country independence in 1962, the problem of housing was resolved by succession process by hoses left by frensh conquerors. However, by the industrialisation, housing need seems to be more and more serious. Annaba is a good example representing the housing issues in algerian cities. Among them we can introduce: Municipal land speculation, marginalisation, low standard housing, illicit constructions, etc. The abscence of well tought urban policy and inadequated urban legislations are the major causes for the no response to the housing needs in Annaba metropolitan area.