CHAPTER TWO
2.10 Applying the asset vulnerability framework to housing policy: The issues of housing and livelihood
passenger transport, to enable beneficiary households to access central areas where almost all opportunities exist.
2.10 Applying the asset vulnerability framework to housing
Informal businesses based on local custom must re-establish their businesses with new customers, and re-orient their supply networks. Such businesses may also face increased competition, if alternative sources of their products are more readily available in their new location. As it is the contention of this study, for their part, formally employed workers, scholars and shoppers may face increased transport time and costs as a result of their relocation. A decision to sell a subsidised house in a 'greenfields' development, may therefore reflect a lack of adequate prior information about their income prospects and expenditure patterns in their new location, rather than opportunism or irrationality. Low-income households in informal settlements may only come into a position which enables them to assess the situation accurately, once relocated.
2.10.2 Economic reconstruction of communities
By its very nature, the subsidy system tends to produce homogenous communities with uniformly low incomes. Because the maximum subsidy amount is only available to the poorest households, developers have an incentive to target the poorest members of communities, leaving out the better-off, in order to maximise the subsidy resources available.
Informal traders and service providers are dependent on the overall cash inflows into their market area. Wage earners and other higher income members of the community are often the critical vectors for such inflows. According to Bay Research and Consultancy Services 'Housing Po/icy and Poverty in South Africa' excising such members from the community in the process of amalgamating households for subsidy purposes, would tend to impact detrimentally on the cash base, markets, and thus income strategies, of self-employed persons such as traders and personal service providers.
2.10.3 Changes to the status of housing assets
There has been information from mass media that the Department of Housing has recently promulgated regulations requiring beneficiaries of subsidy projects to hand over materials from their previous informal dwellings, such as zinc sheets and plywood. This is intended to
prevent such households from surrounding their subsidy houses with informal additions. This signals another significant change to the asset profile of beneficiary communities.
In informal settlements, there are few, if any official regulations governing employment of housing assets, for example, relating to rentals. Although regulations do exist, they are typically based on implicit or explicit community agreements regarding such matters, and thus reflect local-level understanding of the new needs and opportunities of residents.
Once relocated to a 'formal' 'greenfields' development, however, such households may well find themselves subject to a range of externally determined regulations that limit their ability to use their housing assets as before. They may be forbidden to construct additional rooms except to a specific standard; backyard-shacks may be disallowed; and informal lodgings may also be discouraged, or become virtually impractical.
In terms of the asset vulnerability framework, such households may, on balance, have experienced a diminution of their housing assets. According to Thurman cited in the Housing Policy and Poverty in South Africa, 1/3 of subsidy beneficiaries in the Western Cape received houses that were smaller than their previous shacks. When freedom to utilise housing assets for income-generation is constrained, the value of such assets may well fall, relative to other parts of the household's asset portfolio.
• Reduced savings capacity
Savings are often a critical element of poor households' livelihood strategies, as the widespread use of stokvels and other group savings mechanisms in South Africa suggests. In terms of the asset vulnerability framework, a decline in disposable income may well be regarded as a negative aspect of relocation to a subsidised housing development, because it decreases savings and increases household vulnerability.
• Disruption of social networks
The most important, but least appreciated impact of subsidised housing on beneficiary households, is the impact on what is known as 'social capital' assets. In the Bay Research and Consultancy Services' report, it is mentioned that social capital consists of relations of
reciprocity within communities and between households, based on trust, social ties, and accumulated inter-household knowledge.
Relocation to a 'greenfields' development, which is often poorly located, frequently involves the disruption of existing neighbourhoods and communities. Beneficiaries are rarely allocated houses in relation to their existing residential and social networks. Friends, neighbours and colleagues may find themselves widely separated, with relative strangers as new neighbours.
This has a variety of potential impacts on low-income households, all of which impact on their vulnerability and the value of their social capital assets. The report also highlights the following as pertinent to the disruption of social networks. Only three factors are discussed for the purpose of this study.
• Increased insecurity
As any household is aware, the mere fact of moving increases insecurity for a time. This is largely due to the lack of knowledge of neighbours, travel times and location of amenities, if any exist, since in many cases people are merely relocated without basic services, facilities and basic amenities. Families with children of school-going age are particularly affected if the children must travel to schools, or shops, through unfamiliar territory because there is not even reliable public transport.
• Inability to absorb or support extended family
Restrictions on use of housing assets and on disposable income, may reduce a households' ability to maintain important obligations to extended family members, which provide an important form of insurance in times of crisis.
• Disruption of solidarity networks and institutions
The most important impact on social capital assets is the disintegration and rebuilding of important social capital solidarity networks and institutions such as churches, women's groups, creches, political groups, burial societies, sports clubs, and even shebeens, the very fabric of civic life in low-income communities.