Hous­ing scores big

More money will be spent to house the coun­try’s poor, but SA’s hous­ing back­log still weighs heav­ily

Financial Mail - Investors Monthly - - Budget 2017 - Joan Muller mullerj@fm.co.za

Gov­ern­ment is clearly putting its money where its mouth is in its bid to pri­ori­tise the pro­vi­sion of ad­e­quate hous­ing for the poor.

The 2017/2018 bud­get for hu­man set­tle­ments and mu­nic­i­pal in­fra­struc­ture has in­creased by nearly 9% to R195.8bn, which is ahead of bud­get in­creases in other key gov­ern­ment ex­pen­di­ture ar­eas such as ba­sic ed­u­ca­tion, health and so­cial grants. Fi­nance min­is­ter Pravin Gord­han said the ur­gent need for ur­ban re­form to over­come apartheid’s spa­tial legacy will ne­ces­si­tate con­tin­ued growth in the hu­man set­tle­ments and mu­nic­i­pal in­fra­struc­ture bud­get, by 8%/year over the next three years. Spend­ing will fo­cus on hous­ing, public trans­port and im­prov­ing ac­cess to wa­ter, san­i­ta­tion and elec­tric­ity.

To pro­mote af­ford­able medium-den­sity rental hous­ing, trea­sury has al­lo­cated R3.2bn to lower-in­come hous­ing projects, which is ex­pected to de­liver 55,171 so­cial hous­ing units over the next three years. By 2019/2020, gov­ern­ment will also pro­vide an ad­di­tional 623,635 house­holds in in­for­mal set­tle­ments with ac­cess to ba­sic ser­vices and 66,554 fi­nance-linked sub­si­dies for the af­ford­able hous­ing mar­ket. In what ap­pears to be a shift away from gov­ern­ment’s pol­icy to pro­mote home own­er­ship among the poor, Gord­han said from now on the fo­cus will in­clude the pro­vi­sion of high-den­sity, rental ac­com­mo­da­tion.

To sup­port this ini­tia­tive, sub­si­dies for so­cial hous­ing have been ra­tio­nalised, with R600m to be repri­ori­tised to the So­cial Hous­ing Reg­u­la­tory Au­thor­ity for in­vest­ment in rental hous­ing units.

Gord­han said that hu­man set­tle­ments min­is­ter Lindiwe Sisulu is ex­pected to soon re­lease a white pa­per on the re­forms nec­es­sary to build more in­clu­sive res­i­den­tial prop­erty mar­kets, and ac­cel­er­ate the up­grad­ing of in­for­mal set­tle­ments.

While gov­ern­ment’s in­creased ex­pen­di­ture on hous­ing pro­vi­sion will no doubt ben­e­fit many low­er­in­come fam­i­lies, it is un­likely to make a mean­ing­ful dent in SA’s hous­ing back­log over the short term.

Lat­est figures from the SA In­sti­tute of Race Re­la­tions place SA’s hous­ing back­log at around 2m units, more than the es­ti­mated deficit of 1.5m houses in 1994. In­for­mal set­tle­ments have bal­looned from an es­ti­mated 300 to more than 2,000 in the same pe­riod.

Bet­ter ac­cess to ba­sic ser­vices: In­for­mal set­tle­ment in Langa, Cape Town

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