SOUTH AFRICA-HABITAT: A Good Home is Still Hard To Own

By IPS Correspondents Reprint | | Print |

James Brew

CAPE TOWN, Mar 11 1997 (IPS) - Providing adequate housing has been one of the hardest campaign policies to fulfill for South Africa’s new democratic government, which this year celebrates its third year in power.

The lack of adequate housing and basic services in urban townships and rural settlements in South Africa has reached crisis levels with some seven million people reported to be living as squatters.

South Africa has a housing backlog estimated at some two million, increasing by 150,000 units per year.

The urban housing backlog alone is estimated at about 1.5 million units and according to Nicky Smith, a community development worker, unless there is a dramatic increase in the pace of urban housing delivery, the housing backlog could increase at a rate of 178,000 units a year.

Inequality in housing is one of the most vivid legacies remaining from the apartheid era. Whereas the majority of white South Africans live in adequately serviced and comfortable housing, the country’s Black majority live in overcrowded dwellings that often lack basic services.

When the African National Congress (ANC) government was elected in 1994, there were promises galore of delivering one million fully serviced, brick-and motar homes over a five-year period. Although the figure has been retained, quality targets are now far more modest.

The new government’s task is far from easy. From the late 1960s, it was the apartheid regime’s policy to restrict the building of housing for blacks in the metropolitan areas.

In 1994, the new government managed to provide 12,000 units and 120,000 in 1995. The housing department aims to build 350,000 units annually by 1998.

Finding the money to build the houses is not the problem. The real obstacle seems to have been the lack of a coherent national housing plan.

For years, housing consistently received one of the lowest budget allocations. However since 1994, the overall allocation has grown, reaching a peak of R2.8 billion (622 million U.S. Dollars) in 1995/96.

One U.S. Dollar is equivalent to about 4.5 Rands.

“Major differences of the past have now been resolved, rules and regulations which tend to stall delivery have now been streamlined,” said Housing Minister Sankie Mahanyele.

According to urban trends, South African cities are growing at a rate of 200,000 households (approximately five people per household) a year.

The government has established a range of financial, institutional, technical and logistical support mechanisms to help communities improve their housing circumstances. For example, in return for mortgage guarantees from the government, financial institutions have agreed to resume lending to low-income households.

“The ANC was unwise to promise a million new dwellings by 1999, but most will be quite impressed if there are half a million new affordable homes; that would equal the number of houses built in townships between 1950 and 1970,” said Tom Lodge, a political scientist at the Wits University’s Department of Political Science in Johannesburg.

South Africa’s enormous housing shortage is most acute among the low income group. It is estimated that about 1.7 million households in South Africa live in shacks on unserviced land, while 620,000 shacks are on serviced sites.

Subsidised housing is one of the cornerstones of the government’s policy to provide housing. Households with a joint income of R800 or less are eligible for a housing grant of R15,000 whereas at the top end, households with a joint income of R2,501 to R3,500 only qualify for a R5000 grant.

The middle income group qualifies for a subsidy on a sliding scale. So far, over 360,000 subsidies have been granted and 30,000 houses built, says the housing ministry. Some 10,000 individual subsidies are paid out monthly by the government.

For large-scale projects, R525 million has been set aside for housing delivery in the Reconstruction and Development Programme to help provide 150,000 low-cost, high density units over the next four years.

According to a report by a government task team led by Bill Cobbett, director-general of the housing department, large-scale developers and financial institutions remain largely absent in the housing market.

Housing finance institutions cite the fact that the low-cost housing market carries a higher risk profile as one of the main reasons for their slow entry.

And according to Duncan Reekie, chairman of the Association of Mortgage Lenders, rising interest rates and growing unemployment are the main reasons why the banks have not financed as many houses as expected.

“At present, South Africa’s traditional financial institutions provide housing finance to just 30 percent of the total population (mainly middle and upper income earners) and non-traditional lending institutions are mushrooming to fill the gap,” said Ruth Motau, a development economist.

“The non-traditional lending institutions are providing between R35 million and R45 million in small, short term loans for housing a month,” Motau added.