South Africa’s human settlements sector faces challenges with the housing accessibility opportunities for the gap market, says the Department of Human Settlement(DHS).
In a recent interview with “Independent Media Property”, DHS Minister Thembi Simelane’s spokesperson Tsekiso Machike, said the gap market pressures are felt more strongly in metropolitan municipalities, intermediate cities, and small towns.
“All stakeholders in the value chain must find long-lasting solutions to this challenge since the gap market challenges drive the proliferation of informal settlements.
“Accordingly, working with all stakeholders including the private sector, traditional leaders and NGOs amongst others is the only solution to provide adequate housing for those in need,” Machike said.
Professor François Viruly, University of Cape Town associate professor and director of the Urban Real Estate Research Unit, said it is becoming increasingly clear that delivery of housing by different tiers of government does not meet the required demand.
He said the DHS recently illustrated the decline in the delivery of housing units in the published white paper.
“There are a number of issues at play that have contributed to this decline, they include available national funding, expertise at different tiers of government, the expertise of chosen contractors and land availability.
“The housing crisis in South Africa is presently moving up the housing ladder from the lowest income segments of the market into the gap market. The rising cost of building and land is making housing unaffordable in the gap market.
“While the answers are not straight-forward, it is critical that a greater emphasis is given to the role of the private sector in delivering housing units,” Viruly said.
Machike said in an endeavour to increase the housing stock, crowding in private sector investment and improving accessibility to affordable housing opportunities, the department in collaboration with social housing institutions (private sector), the sector delivered 3 066 social housing units for the 2023/24 financial year.
“Again, the department has joined efforts with the Infrastructure Fund to create a portfolio of blended finance social housing projects to mobilise private sector participation in the sector.
“The NHFC continues to lead our efforts in waging the battle against unaffordable housing, especially for the gap market through its First Home Finance offering,” the spokesperson said.
Machike said DHS has not been immune to the budget cuts across government departments and this has prevented them from delivering houses for all.
However, he said with the limited resources allocated to them, they have and continue to restore the dignity of South Africans.
DHS said some of the undertakings of their priorities included the unblocking of blocked projects.
During the last budget vote, the department undertook to prioritise projects that were blocked, thus denying qualifying beneficiaries access to housing.
“We made funds available for this special project. Out of the 3 445 projects that were reported by provinces as blocked, we have managed to unblock and complete 3 150 of those projects.”
With regards to informal settlements, Machike said the upgrading of informal settlements remains one of their key priorities.
“It is for this reason that in the financial year of 2019/2020, in consultation with the National Treasury, we introduced the Informal Settlement Upgrading Grant (ISUPG).
“This was an attempt by the department to ensure that there is a focus on upgrading informal settlement projects within the sector which is vital to the creation of a life of dignity for the dwellers and to breaking the apartheid spatial development.”
The department said most of the provinces are currently busy with the assessment of the existing asbestos roofs that need replacement.
However, it emphasised that this exercise is taking longer than anticipated as this is a specialised field that requires special handling.
The minister’s spokesperson said mud houses have become high-risk structures in areas that are prone to disasters, especially the coastal areas.
“It is comforting to mention that since the inception of the eradication of mud houses programme in 2022, seven provinces have played a vital role in ensuring that we eliminate mud houses, with 30 618 mud houses eradicated to date.
“During this financial year, we plan to implement 670 projects across the country with a total budget of R2.5 billion,” Machike said.
Viruly said the housing sector has a strong direct and indirect impact on the economy. He said it does not only acquire goods and services in the construction process but adds significant value through the value it creates through employment of skilled and semi-skilled workers.
“The point has also often been made that the improvement of household education and health is directly correlated to the quality of housing.
“The president has on numerous occasions made the point that SA households are asset-poor, the ownership of a home provides households with an asset that can be sold, inherited and if required used as collateral.”
He added that it also implies that the significant backlog in the provision of title deeds needs to be addressed - households that are not in possession of a title deed are denied the full bundle of rights associated with property ownership.
“Looking at the impact on the property market, the failure to meet housing demand increases the value of existing homes which in turn reduces affordability for those entering the market.”
Machike said the department, through its Medium Term Development Plan (MTDP), intends to implement programmes that would transform human settlements into liveable and sustainable spaces through spatial targeting and consolidation.
“However, we should wait for the Minister of Human Settlements to announce the department’s priorities in her 2025/2026 budget vote speech.”
The Director of the Urban Real Estate Research Unit at UCT said SA needs to start looking at the densification of inner cities-especially along transport corridors.
“While the number of houses delivered is of importance, we should also be considering the location of these residential units. We cannot continue developing 40 sqm houses, 40 kms from the place of work, and where households spend 40% of income on transport.
This will require the delivery of housing much closer to places of work which indirectly improves the affordability of housing.“
INDEPENDENT MEDIA PROPERTY