The causes of informal settlement are closely tied to limited housing affordability associated with income poverty, unemployment, unrealistic procedures of settlement establishment, continuously escalating land prices, unfair land allocation practices and inflexible financial systems. Income poverty and underlying national macroeconomic factors, especially wealth distribution and job creation, play a central role in determining the process of informal settlement. Low income presents limited opportunities for the urban poor to afford housing or to meet basic non-housing needs. Hunter and Posel (2012) assessed the urban poor’s ability to afford owning or renting a house on the market relative to their level of income and conclude that the urban poor reside in these settlements out of necessity. According to Hunter and Posel the urban poor choose to reside in these settlements where they can fix their position in the city at extremely low financial cost. They incur relatively low cost for:
a plot of land, reticulated infrastructure services, building materials and labour; purchasing, renting and maintaining a house; and commuting to-and-from work. Thus, spending a small portion of their income on housing allows these households to meet basic non-housing needs. Hence, they consider well-located sites as having locational value that cannot be quantified.
The urban poor’s need for housing in a specific location close to work is more important than residing in housing at the urban periphery (Landman & Napier, 2010; Crankshaw & Parnell, 1996). Within the city, the high costs of transportation make trips to-and-from work extremely expensive especially for poor households in precarious work who reside in peripheral locations of the city. Moreover, gaining work as a casual employee in domestic quarters, manufacturing and construction industry, or
98 collecting and selling scrap requires the urban poor to be located in particular inner-city areas. In the context of a very limited supply of low-income housing and high transport costs, residents of informal settlements are justified to locate their housing in pockets of urban land nearby employment opportunities.
Although most residents of informal settlements are poor, poverty is not the sole cause of informal settlement. Ethnographic data indicates that the level of absolute poverty has decreased while informality has grown (Boudreaux, 2008), suggesting that other factors may also be responsible. Davis (2006) and Berner (2007) suggest a combination of factors contribute to informal development including unfair land allocation, obsolete registration practices, unrealistic standards and lengthy procedures of settlement establishment, inflexible financial obligations and inefficient conflict resolution mechanisms.
There is a common perception among those involved in the land dialogue that land allocation, tenure and use are fundamental to solving the problems of informal settlements. They argue that mechanisms of land allocation are highly unfair to the poor because they segregate those who cannot afford from accessing housing opportunities. Land ownership is fundamental to accessing housing, and its lack prevents the poor from accessing low-income housing. In South Africa, the land challenge is complex; historical land claims remain unresolved because the land policy requires that land should be exchanged in the market, yet the majority of South Africans are poor.
A major constraint on low-income housing development is the continuous escalation of land prices.
Land speculation plays an influential role in increasing the market price of land. Market-led delivery of land and housing in inner-city areas is characterised by prices that are high relative to incomes. In the absence of significant public subsidies, private developers are traditionally reluctant to develop housing for the low-income segment of the market (Savage, 2014). The increases in the price of urban land and construction costs causes a large increase in the prices of dwelling units. Most households have very low incomes to allow them to afford housing built by private developers. One consequence of land price escalation is that the market forces out those who are unable to pay, thus making room for the acquisition and development of urban land outside the law. Informal land exchanges and unauthorised construction are widespread and reflect the inability of local authorities to deliver AURL for low-income housing in inner-city areas (Mohamed, 2006). Land is allocated by land barons to individuals either verbally or with a false title. None of these processes accord with the provisions of South African land law, but they are practised with little challenge. Such a system of informal allocation provides the poor with no legal means of accessing housing. As a result, most low-income earners who
99 are not able to afford the price of housing on the market resort to establishing settlements in pockets of land in the inner-city that lack reticulated infrastructure services and amenities (Lemanski, 2009).
Local authorities have traditionally underfunded reticulated infrastructure services in areas settled by low-income groups. The resulting lack of affordable serviced urban land has the effect of creating more informality especially when municipalities struggle to integrate land, housing and finance policies to deliver AURL for low-income housing. Compounding the situation is the inability of local authorities to convince low-income communities to pay for the provision of reticulated infrastructure services. According to Bradlow et al (2011) these communities expect the local government to provide reticulated infrastructure services for free, and thus, abscond the financial responsibility of paying for utilities by residing in informal settlements.
To its credit, the ANC-government has one of the best public housing delivery records in the world (Hunter & Posel, 2012). While its achievement is notable, the scale of low-income housing need remains far greater than the rate of delivery, thus, the growth of informal settlements keep increasing rapidly. As shown in Tables 4.1 and 4.2, the total number of households in informal dwellings is far larger than the relative increase in the number of households overall. In the same period, the percentage of households in informal dwellings doubled from approximately 7.5 per cent of all households to nearly 15 per cent between 1996 and 2006 (ibid). Based on this evidence, one can conclude that the scale of informal settlement outpaced the scale of public housing delivery. The reasons for this trend could be linked to rapid urbanisation and a limited housing subsidy.
Table 4.1 The Percentage of Households in Informal Settlements, 1996-2015
Number of Households (millions) Percentage of Households in Informal Settlements 1995 1997 1999 2001 2004 2006 2009 2011 2015 1995 1997 1999 2001 2004 2006 2009 2011 2015 7.69 7.82 8.97 9.82 11.0 11.4 11.5 11.6 11.7 8.8 13.6 14.8 14.6 17.0 16.5 17.3 18.2 18.9
Source: StatsSA (2017)
Table 4.2 Growth of Informal Settlements in Major Cities, 1996–2011
City Human Population Percentage of Population in informal settlements
1996 2001 2011 2015 1996 2001 2011 2015
Johannesburg 2 497 947 3 075 659 3 898 741 4 919 607 19.4 18.3 17.6 14.0
Ethekwini 2 343 597 2 701 885 2 354 116 3 476 907 20.9 18.1 15.8 12.1
Cape Town 2 461 034 2 743 130 3 309 388 3 977 150 18.1 17 20.6 13.9
Ekurhuleni 1 925 280 2 381 005 2 720 806 3 353 395 25.7 25.5 21.7 15.0
Tshwane 1 658 495 1 996 634 2 270 985 3 245 902 20.3 22.1 18.2 13.7
Nelson Mandela Bay 928 868 966 073 1 021 998 1 256 723 26.4 19.3 12 5.9
Buffalo City 575 331 622 646 508 618 790 412 25.3 25.3 22.4 20.2
Mangaung 547 500 595 761 589 931 780 103 23.4 20.2 14.2 10.9
Msunduzi 370 441 417 564 358 080 579 082 0.9 14.6 8.4 7.3
Total 13 308 493 15 500 357 17 032 663 22 379 281 21.1 20 18.1 13.3
Source: StatsSA (2017)
100 The limited housing subsidy provided by the state cannot keep pace with the continuous escalation of prices of land in inner-city areas; the delivery of public housing becomes limited yet demand is very high (Hunter & Posel, 2012). Therefore, the quantitative and qualitative dimensions of housing demand have not been met, thus, reinforcing socio-spatial segregation. The inconvenience that public housing imposes on the poor due to its limited size and poor location is forcing the beneficiaries to abandon such housing and seek shelter in informal settlements (Turok & Borel-Saladin, 2016; Savage, 2014; Bradlow et al, 2011). According to Wakely and Riley (2011) similar observations have been made in cities as far-flung as Nairobi (Kenya), Phnom Penh (Cambodia) and Ahmedabad (India) and the inhabitants of these settlements are reported to experience powerlessness.
Powerlessness unveils opportunities for political exploitation of the urban poor by politicians and bribe-seeking public officials in their daily struggle to access housing and avoid eviction (Mitlin &
Satterthwaite, 2004). Shortage of AURL and low-income housing is enormous and politicians who are able to influence the allocation of public housing to their supporters at the expense of the targeted beneficiaries are increasing the shortage of housing among low-income households, which pushes them to seek shelter in informal settlements (Savage, 2014). In some situations, politicians seem to allow new land invasions by people who promise to reward them through the ballot box. Informal and arbitrary allocation of land by politicians for unauthorised land-use distorts land management systems. The actions of such politicians, in both instances, have a direct impact on the growth of informal settlements.
The complicated situation presented above that is creating such widespread informality is reinforced by the obsolete and contradictory workings of the overall legal and judicial system in South Africa.
Local authorities are compounding the situation as their tolerance for violation of laws and the widespread lack of enforcement of laws are contributing to the growth of informality. Their hesitation in taking decisive legislative action especially on the expropriation of land without compensation is prolonging uncertainty as a resolution of the land question or informality has not been reached (Bradlow et al, 2011). The current land laws are abetting a pattern of socio-spatial segregation. In order to gain an insight into the informal settlement situation in South Africa, this study assesses their spatial distribution in relation to the urban space economy. It is vital for this study to identify the locations the urban poor settle on in response to affordability challenges. This allows this research to devise a mechanism that could deliver urban land in such locations at price levels that the urban poor can afford.
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