Potential gap market ‘sizeable’

DETERMINING the demand for gap housing in the Western Cape is difficult, says Western Cape department of human settlements minister Bonginkosi Madikizela, but the potential market is “quite sizeable”. According to the 2011 census, about 593 000 households earn between R3 500 and R15 738 a month.

Introduced in 2012, the Finance Linked Individual Subsidy Programme (Flisp) was intended to help people earning between R3 500 and R7 000 a month, but in 2014 was expanded for earnings up to R15 000 a month.

“According to the department’s Annual Performance Plan for 2018/19, a total of 426 Flisp subsidies were disbursed in 2015/16 and 745 in 2016/17.”

Madikizela says developments that cater to what people in the gap market can afford is an avenue for investigation, and discussions have already begun with the construction sector.

Madikizela says alternatives to mortgage financing must be investigated, and the Flisp policy includes a provision which allows municipalities to make free serviced sites available to qualifying households earning between R3 500 and R7 000 in lieu of a Flisp subsidy. The department is developing guidelines enabling access to serviced sites for this lower gap market.

“This should enable tenure security and incremental development for an affordable housing beneficiary, without the dependency of accessing mortgage financing. The department also intends to explore possibilities for affordable mortgage loan designs.”

Madikizela says the provincial department is already trying to provide units accessible to the gap market, with the most recent annual performance plan (2018/2019) indicating there are 16 land release projects with Flisp components included in the project design. In total, this will include around 4 290 units.

The projects include:

Dal Josafat – 1 200 units.

Belhar CBD – 1 000 units.

Stellendale – 140 units.

Nuwe Begin – 591 units.

Blue Downs 1 200 units.

Eerste River – 19 units.

Blue Downs 2 – 50 units.

Brentwood Park – 42 units.

Delft – 210 units.

Khayelitsha 1 – 198 units

Kuils River – 99 units

Khayelitsha 2 –100 units

George – 80 units

Mitchells Plain – 142 units

Charlesville – 70 units

The Conradie hospital site in Pinelands will yield 361 Flisp units in 2020/21 and around 1 800 units for sale.