The argument: What with South Africa’s formidable legacy of social struggles over urban shelter issues, more was expected of the first democratic government’s housing policy, and less was delivered, than in practically any other area of social policy – largely because neoliberal assumptions and housing delivery mechanisms were adopted during the carefully managed transition process.
MATERIAL INTERESTS, IDEOLOGICAL CONFLICTS
Whether looking at housing from bottom up or top down, this is perhaps the most important component of social policy to get right.1 The employment potential, substantial macroeconomic multipliers and relatively low import cost together mean that housing is well suited to play a central role in any progressive economic development strategy. From the standpoint of the household – particularly women caregivers – decent housing improves family health and hygiene, provides privacy and a chance to raise children, and ensures the psychological security that comes from ‘tenure’ (the ability to stay in a house without fear of being displaced). Finally, secure, well- integrated housing developments can enhance community and mutual aid activities within a given neighbourhood.
But housing represents a rather different set of costs and benefits to individual capitalists. As the single most substantial expense in most household budgets, it represents the main financial cost in what is often termed ‘the reproduction of labour power’.2Housing costs in turn drive up wages higher than they would be if either substantial
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state-provided housing existed for workers, or some form of ‘self-help’
system lowered the cost of shelter (a self-built shack entails only a fraction of the carrying costs of a formal house with a bond, although as we shall see, there are social and health costs which get passed back to women and the family). In the past, industrial firms often offered housing on or near factory premises to employees at no cost, in order to directly lower such costs while at the same time assuring tighter control of the workforce; for millions of South African mineworkers, farmworkers and domestic workers, this is still the case.3
From this standpoint, the incentive for capital in general is to lower the costs of reproduction of labour power, which has meant a shift from grudging acceptance of major public housing programmes for workers (common when the townships were built in the mid- twentieth century) to the site-and-service model of the late 1980s.
And yet the opposite incentive exists for other firms engaged in the act of supplying housing: the provision of building materials, acquisition of (and speculation on) suitable land, construction, financing and management of housing.4The construction industry ultimately proved weaker than the interests of capital-in-general, and particularly than the deficit hawks in the financial sector.
Indeed, as in most fields of socio-economic development in transitional South Africa, the struggle over housing boiled down to a classic conflict over resource allocation. When debates over the direction of post-apartheid housing policy began in earnest during the late 1980s, a series of housing questions emerged:
• Would the rulers of the changing society permit a substantial portion of the social surplus – particularly the government budget – to be directed into housing and related services?
• Would those resources be allocated in a non-sexist, non-racial manner which broke from old practices?
• Would housing and services be linked to the restructuring of other development programmes (health, education, childcare, urban planning, environmental protection, recreation, etc.)?
• Would a housing construction programme support macroeco- nomic growth and micro-socio-economic objectives?
• Would public resources be used in a manner which could maximise the contribution of funds from private financial sources?
• Would state subsidy funds be delinked from the nuclear family model of black petit-bourgeoisification which characterised late apartheid policy?
• Would they be delinked from market forces, which in turn might undergird the demands for permanent affordability and community solidarity which were the basis of so many popular struggles?
• Would hostels be transformed into family units as the inhumane migrant labour system was phased out?
The answer to all these questions – not only during the early 1990s transition but in the years immediately following the 1994 election – was no. To understand why, and to establish the basis for a different approach in future, requires us to delve deeply into the policy-making process, or more precisely, into the construction of policy discourses which evolved from the late 1980s through the early 1990s.
No was a surprising answer, for no one defended the existing quagmire of state and private corruption, incompetence, collapse of public services, ingrained official racial and gender discrimination, and market failure (such as ‘red-lining’, ‘negative equity’ and the utter inability of low-income to enter the formal housing market).
Indeed, these state and market failures were often met by fierce community resistance. Yet a fundamental break with past housing policy appeared impossible under conditions set by multi-‘stakeholder’
negotiations (the National Housing Forum), recalcitrant bureaucrats, the spectre of neoliberal fiscal constraints and, ultimately, a lack of political will and imagination. Not even the appointment of Housing Minister Joe Slovo in May 1994 (who served until his death in January 1995), concurrently the chair of the SA Communist Party, made a substantive difference in many of the key areas.
The missed opportunities here were substantial, given that the prospects for an alternative economic development model based on a housing ‘kick-start’ were well recognised by progressives (and had been used, in previous eras, to great effect in developing countries with such divergent macroeconomic strategies as Singapore and Colombia). The moral imperative was also clear, as there emerged realistic estimates of 3 million homeless families in South Africa’s cities and countryside (and more conservative figures such as 1.3 million, cited by Slovo in his inaugural parliamentary speech, a figure which ignored the need to provide replacement housing for hundreds
of thousands of inhumane hostel beds, for urban shacks that were on deeded properties, and for rural huts).5
In any humane society this degree of backlog would have generated an immediate consensus for a massive housing construction programme, subsidised by the state, tapping private financial resources, using the dramatic overcapacity of the building materials and construction industries, and with the participation – and ultimately under the control – of community-based organisations. In the New South Africa, however, it was not to be.
The profound failure of transition politics in the housing field can mainly be traced to very hard ideological positions taken by late apartheid state agencies and liberal capitalists, exacerbated by inadequate and inconsistent ANC staff attention, and cemented through the ‘coerced harmony’ of the kind of bogus social contract formation described in Chapter 2. By the time the ANC took power, there was a bizarre consensus in place in the housing policy-making field which recognised all players – no matter their track records, their intentions, or their relation to the democratic forces – as equally viable, credible and necessary components of the grand pact.
This is not to say that the democratic forces did not initially adopt (and maintain) equally hard principles: the traditional Freedom Charter promise that decent, affordable housing is a human right, a promise translated into a tough-talking 1994 Reconstruction and Development Programmehousing pledge and even into a hard-fought constitutional ‘right to housing’ provision in the Bill of Rights, adopted in 1996. But it is then to acknowledge the gradual demise of those principles as processes of coercive harmony set in.
We can set the stage for understanding the elite transition in housing policy in this chapter by considering the old regime’s
‘deracialised urbanisation’ strategy gradually to evolve apartheid racial segregation into class-based segregation. As we shall see, this was done in a manner that also invoked a new political strategy: a form of corporatism based on the definitive mediation of the market.
The agents most responsible for introducing the late apartheid regime’s neoliberal housing policy were a group of academics, advocates and deal-makers located within and around the Urban Foundation (UF), the privately funded think-tank and housing developer set up by the Anglo American Corporation in the immediate wake of the 1976 Soweto riots. The UF was untiring first in its search for minor palliatives for apartheid – for example, drafting the despised
Black Local Authorities Act of 1983, and always falling just short of endorsing one-person, one-vote during the 1980s – and then as lead stormtrooper for neoliberal social policy from the late 1980s until its closure in 1995.
Thus we begin the chapter by considering how the UF was indirectly responsible for the plight of community organisations which found their hands tied by the diminishing options for solving concrete problems. At the same time, Democratic Movement politicians were hoodwinked by Establishment promises during this turbulent period of ‘paradigm shift’, much like the broader social contract elite-pacting exercises described earlier.
The UF’s success was based in some measure upon an earlier sell- out by a coterie of formerly radical scholars who drifted rapidly into consultancy mode. Intellectual struggles are rather minor in the whole scheme of things, but they do occasionally foretell trends in broader societal discourses, as academics scramble to claim relevance and legitimacy in the sphere of popular politics. For that reason it is also interesting to note the ideological journey travelled by some of South Africa’s most respected urban scholars, who played a crucial role in what became a non-stop barrage of conservative policy argumenta- tion and politicking. This attack found progressives either wilting under the pressure or falling into oblivion outside the harmony model.
The neoliberal barrage continued from the early days of UF site- and-service policy (adopted by the Independent Development Trust in 1990); to a series of World Bank studies beginning in 1991 which mainly served to highlight the distance between Washington, DC and Johannesburg; to the econocrat-influenced De Loor Task Force on housing in 1992; to the demands of banks to recoup their questionable township investments in 1993; to the meanderings of the National Housing Forum (practically a subsidiary of the UF) in 1993–94; to the status quo policies of both new and residual bureaucrats who appeared to wield so much power over transitional housing policy in 1994; to the mild amendments made to a failing policy in 1995–98, amendments which (until Cosatu finally intervened in the October 1998 Jobs Summit with a more expansive plan) propped up the most destructive techniques of housing policy with yet more badly directed subsidies favouring banks and developers, not real people.
Nevertheless, as we shall see in the concluding chapter, ultimately it was the conceptual strength of South Africa’s urban social movements during the late apartheid era when neoliberal housing
policy became generalised – as witnessed in a 1993 Sanco housing policy document subsequently adopted by the ANC within the 1994 RDP– that kept hope for a real housing policy alive until (and perhaps beyond) the bitter end. For even if the transition from late apartheid housing policy was barely discernible, thanks to the fact that civics and other community radicals were forced to swallow and to regurgitate the conservative line at key junctures, this offers no basis for the maintenance of status quo policies in future.
As the failure to accomplish anything like the expected delivery of mass housing continues, resurgent social movements will denounce the growing crisis, look back at the RDP, and ask a new version of the timeless housing question: how was it that the visionary RDPpages on housing became loo paper in the hands of the new government’s bureaucrats? This chapter offers one interpretation of the astonishing advent, in an ANC-led South Africa, of a scaled-down, market-oriented approach which earned the epithet ‘toilets-in-the-veld’ policy – from no less than Slovo’s successor as Housing Minister – instead of the policy anticipated by the Democratic Movement.
STORMTROOPERS OF MARKET-CENTRED HOUSING POLICY
Notwithstanding the peculiarities associated with formal racial segregation, many of the same problems that characterise housing in fully-fledged capitalist societies – displacement of the poor, homelessness, rampant slums, sterile land and ghastly suburban strips, side by side with excessive urban and suburban affluence translated into overconsumptive, atomistic housing – were exacerbated in the years immediately preceding and following the 1994 election. To understand why shelter in transitional South Africa may actually be worse for more people than during the harshest years of apartheid oppression requires an explanation of the process by which racial segregation degenerated into a combination of residential class segregation and housing market failure, overlaid by neoliberal fiscal policies which slowly but surely strangled the potential for realising the benefits of proper shelter.
This was not accidental, and in an accompanying box (4.1), we consider how the UF came to be the main vehicle for imposition of neoliberal policy in South Africa’s cities. Thanks in part to UF lobbying
efforts, blacks were allowed to live permanently in urban townships by the late 1970s (on 99-year leases), and then during the early 1980s were gradually permitted to take out bonds on new houses, and then on improving those township matchbox houses that were in the process of being privatised. During the mid- and late 1980s, townships were inundated by private capital, ranging from huge financial institutions to shoddy small developers out for a quick killing.6
Yet black township resistance to the UF – often as intense at the ideological level due to the UF’s big business sponsorship as it was at the practical level due to substandard development projects7 – generated a range of responses. One measure after another was taken from the late 1980s to improve the UF corporate image, including gradually reaching out to influential leftist intellectuals (see Box 4.2), until finally in 1995 the institution was considered a lost cause and shut down.
Box 4.1: Housing’s shaky foundation
What the UF was trying to accomplish was the development of a black middle class through massive increases in personal debt. In this manner, the militancy of trade unionists or civic association leaders would be tempered by the responsibility of repaying a housing bond. As expressed by Zach de Beer, South Africa’s lead capitalist politician, in 1988, ‘When people are housed – more especially when they are homeowners – they are not only less likely to be troublesome. They are also likely to feel they have a stake in the society and an interest in its stability.’8One leading UF strategist, Jeff McCarthy (formerly the leading urban Marxist scholar in South Africa) had hoped that local alliances between local civic associations and developers/financiers would ‘hasten the prospect of alliances on broader political questions of “vision”’.9
The UF’s own vision was often disguised, rhetorically, as ‘social- democratic’, consistent with a (German-style) ‘social market economy’. But even in cases where the UF promoted some role for the state, the market would set the parameters. Thus the UF lobbied hard for policies which promoted investment competition between towns and cities, although this denied outlying areas and regions access to ‘decentralisation subsidies’ (no matter how well or poorly they were used) and reduced urban areas to mere export platforms.
In generating these policies, UF strategists were inspired by the World Bank, especially during the late 1980s/early 1990s drafting of the UF Urban Futurespolicy series. One direct result of UF lobbying was a R750 million site-and-service programme – which quickly became known as toilets-in-the-veld – implemented by the Independent Development Trust (IDT). The IDT was a parastatal- cum-NGO itself founded in early 1990 (by de Klerk, who turned it over to the then UF chairperson, Jan Steyn). The IDT was given R2 billion to foster local social contracts in townships and rural areas, concomitant with the rapid political liberalisation then underway.
It was, quite explicitly, a fund for buying out or at least deflecting militant grassroots opposition, an update of the Botha regime’s mid–late 1980s ‘oil spot’ strategy of pouring oil on troubled water.
Aside from playing unpopular guinea pig by implementing frugal UF policies – which won the agency’s acronym a new popular tag:
‘I Do Toilets’ – other side-benefits of Steyn’s IDT early 1990s reign included temporarily rescuing a failing UF housing loan guarantee initiative; channelling millions of rands into a questionable UF Cape Town ‘group lending’ operation which ineffectually relied on peer pressure for small loan repayment; and lending tens of millions of rands to a UF subsidiary (the Land Investment Trust) at 5 per cent interest which – because the loans were then repaid by poor people as bridging finance at 18 per cent – bailed the UF out of its disastrous mid-1980s land acquisition strategy. That earlier strategy of Steyn’s had resulted in the UF’s development subsidiaries declaring an impressive R17 million loss in 1991, on a R12 million turnover that year.10But soon the various under-the-table IDT donations kicked in and the UF was back in the black.
Box 4.2: Retreat of the urban scholars
During the late 1980s, the UF forged important relationships with an ageing clique of white radical men who at that stage began acquiring new homes, cars and the like, finally discovering their logical class location after a decade or more of anti-apartheid rebel- liousness. A variety of academics allied to the Democratic Movement11were given lucrative consulting gigs to produce highly confidential UF papers on urbanisation. Barring the odd exception, in the process they not only sold out their earlier radical beliefs, but
also showed a surprising disdain for the emerging societal demand for transparency.12
Most of these consultancies were mediated by the former radical geographer, McCarthy. In 1989, McCarthy and his collaborator Dan Smit moved to the UF from the University of Natal, where both had previously criticised capital’s agenda with undisguised venom.
But faster even than apartheid bureaucrats changed their stripes, McCarthy and Smit rapidly transmogrified into the UF’s leading guides to the Left and its most insipid apologists.13Amusing in retrospect, this, but quite disheartening at the time, considering that some of the white radical urbanists had served a generation of students and activists as role models for both non-racialism and academic-based involvement in the Democratic Movement. In a 1986 article characteristic of the earlier spirit, for example, McCarthy (and his far more reliable co-author Michele Friedman) condemned his soon-to-be employer the UF for
the way in which the ideology of ‘community self-improvement’
was harnessed by the bourgeoisie and petit bourgeoisie: an ideology that served both to mystify the sources of class oppression, and to alleviate some of the objective causes of dis- satisfaction (and hence class action) amongst the urban poor ...
It is no secret of ... the Urban Foundation, of course, that the
‘social responsibility’ of big business in South Africa was and still is identified as being in the areas of the rapid creation of a black petit bourgeoisie, and the promotion of the philosophy and practice of ‘self-help’ in areas such as housing and the provision of community facilities.14
More ironically yet, McCarthy unerringly noted the ‘real danger’
that researchers would,
once more, be caught up within a momentum of the social construction of urban problems, the complex nature of which is seldom the subject of scrutiny or critical self-reflection. We now find, in urban geography and planning, for instance, erstwhile liberal intellectuals marching hand-in-glove with progressive elements of the State and capital in a veritable orgy of work on ‘informal sector solutions to black housing problems’.
These ‘solutions’, however, are inevitably slanted towards the