CHAPTER 6: HOUSING POLICY AND PRACTICE
6.10 Summary
The failure of the formal and private housing institutions to design products that efficiently works for the low-income group increases their preference to work with middle and upper income groups. As a result, there is actually the existence of two housing markets. The first housing market generally composed of the middle and the upper income groups prosper and witness a boom. BASA (2005) observes that in the last years, properties costing R 200 000 upward, double their prices and in some cases even triple. However, the second market costing less than R 70 000 generally constituted of RDP houses and houses in former black townships, slump. In fact, trade in this sector is very slow. This does not stimulate the private sector to invest in the second market.
The biggest challenge for the BNG is to break the existence of the two housing markets and to increase the incentive of the private sector to invest in the construction of adequate and affordable housing, defined by BASA (2005) as houses costing less than R 100 ODD, as it is engaged in the first housing market.
existed in South Africa and to stimulate the economy in order to improve the living conditions of poor households that were disadvantaged during the Apartheid era and, in turn to create sustainable human settlements. Since democracy the NHP has given rise to a highly integrated arrangement of institutions, such as the Provincial Department of Housing, The National Housing Financial Corporation and Thubelisha Homes, to name a few. These institutions create a strong and cohesive structure and are well placed to address both the changing problems and opportunities that exist within the environment.
In addition to these institutions there is a range of private sector, NGOs and community based institutions and organisations within the housing sector. These organisations have a critical role in assisting the government in dealing with the massive housing backlog. These non-State organisations include suppliers of material and services to the housing sector; the construction sector; the financial sector; employers;
communities, civil society and non-governmental organisations.
The South African Housing Policy offers enormous opportunities for all stakeholders in the housing sector. In addition, it offers the opportunity for the broader South African society to continue to grow and develop as the housing crisis is overcome. The government is committed to a South Africa, in which each and every person has access to adequate housing in a manner that supports their development as functioning members of society. However, according to Baumann (2003) the failure of macro-economic reforms through Structural Adjustment Programmes to foster economic growth as expected, on which housing policy performance is based, is one of the causes of the poor outcome of housing delivery in South Africa. For the Department of Housing, the limited access to affordable land for low-cost housing in the urban areas of South Africa is one of the main causes of the poor outcomes of the first ten years of housing delivery.
The provision of land for low-income housing has therefore been a very complex matter for the scale. The White Paper on urbanisation (South Africa, 1986) states as a point of departure that land for housing should be provided well in advance, but, because of the strong resistance by the more privileged groups, the State is experiencing numerous problems in trying to provide such land. South Africa is, however, not the only country where the provision of housing has been totally inadequate. Leckie (1990) provides a useful international orientation concerning housing provision in the world.
Land in South Africa is a scarce resource and thus it is an easy target for speculation. Unlike other socialist states that have nationalised land, or at least attempted to control the transfer of land, in order to safeguard the optimum use of the land and in turn serve the social needs of the community, South Africa has a free market policy in respect of land acquisition and distribution. Expropriation is considered problematic since it would tend to threaten the government's support from a significant portion of the population. On the other hand buying the land at market related prices is largely beyond the means of a young democratic nation. Often nationalisation and re-privatisation of former large landholdings is the adopted practice. The government can in turn build up popular support, particularly among the rural population. It should be interesting however, to observe, whether the State can succeed in controlling the transfer of land ownership and prohibit the practice of land speculation.
Analysts such as Baumann (2003); Khan and Thrume (2003), Huchzermeyer (2003);
Charlton (2004) and many others agree that the housing policy that was adopted post Apartheid failed to achieve its stated goals. Concerns were raised about the poor quality and poor location of low-cost housing and the difficult access to housing finance for low-income households. Conclusions drawn by housing researchers such as Huchzermeyer (2003) and Baumann (2003) is that, instead of empowering poor people through housing delivery, the provision of low-cost housing either deepens poor households' vulnerabilities or perpetrates segregation created by the former Apartheid regime. In response to complaints about the poor results of the first ten years of housing delivery, in 2004 the National Department of Housing adopted a post Apartheid vision or plan for the next five years, referred to as BNG. This primarily aims to bolster housing delivery and to stimulate the creation of sustainable human settlements through supporting informal settlement upgrading and supporting the entire single property housing market.
Despite the huge progress being made in the housing finance sector, especially after the adoption of BNG, access to housing finance for the low-income group, remains complicated and the housing market for poor households remain dysfunctional.
Regarding the development of the housing policy in South Africa, Pottie (2004) observes that it has grown in complexity. This thesis explores the direction taken by the housing policy, which is biased from its origin. The policy focuses on the provision of houses for low-income households. The policy does not succeed in empowering the poor. Baumann (2003) explains this idea when he argues that given the financial situations and the way most of the low-income households earn their incomes in South
Africa the housing policy should have relied on micro-economic reforms rather than on macro-economic reforms.
The empirical part of this thesis will analyse and compare two different neighbourhoods. The first type of neighbourhood was developed through government intervention, where the State provided a 30m2 RDP houses to low-income households.
The second type of neighbourhood was not developed through the RDP process. The research will focus and investigate the transformation of these neighbourhoods and the manner in which they are succeeding to develop and integrate them into the urban future. Regarding the first type of neighbourhood, essentially developed through housing subsidy, Zack and Charlton (2003) observes that its beneficiaries are concerned not only about the poor quality of their houses but also about the future of their children as they live in settlements, which do not provide them with economic, social and educational opportunities. The provision of subsidised housing in the peripheries of towns and cities raises concern about the importance of the urbanisation process and sustainability in South Africa.