Housing scores big

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

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