This thesis aims to deepen understanding of the links between the land price system that influences access, use and ownership of urban land, and the unconventional system that the urban poor use to access housing in South Africa. In addition, they have helped develop appropriate explanations for the link between the land pricing system and inequality and informal arrangements.
Introduction
Thus, the legacy of colonization, segregation and apartheid left most urban Africans unable to access AURL and low-income housing in South Africa after 1994. The struggle of the urban poor for economic emancipation and egalitarian distribution and ownership of urban land and housing resources has continued for decades without resolution.
The Legacy of Unjust Land Ownership in South Africa
Apartheid legislation5 denied Africans the right to tenure to land and real estate outside the indigenous reserves which is not the right (Hall, 2004; Dewar, 1999; Kirk, 1983), forcing most of them to live in resort and overcrowded Bantustans or to live in townships on the urban fringe. (Mabin, 1991; Davies, 1981). However, Africans are still marginalized from urban land and housing markets and the reluctance of the state to.
Problem Statement
5 management system that is failing to provide them with access to AURL or to enable the state to purchase compulsory urban land for low-income housing. Most scholars speculate heavily on the inefficiency of the urban land market (ULM) and although they agree on the diagnosis of formal market failure, they disagree on possible solutions (Berner, 2007).
Research Objectives
This study sought to provide an alternative solution to the AURL and housing shortage by creating a mechanism that could provide urban land in strategic areas at prices that are based on the income of poor households.
Key Research Question
Subsidiary Questions
Hypothesis
Justification of Study
Land and housing strategies adopted after 1994 to ameliorate severe housing stress have so far failed to provide AURL and low-income housing in accessible livelihood locations. Perhaps this mechanism could provide AURL for low-income housing for the majority who are poor.
Research Methodology
Selection of Case Study
Unfortunately, the majority of low-income households live in abject poverty, trapped in informal settlements close to industrial and commercial centers in the municipality ( Breetze, 2009 ). The metropolitan region's terrain, which consists of rolling hills and valleys, makes most of the land unsuitable or too expensive for low-income housing.
Data Collection Methods
Thus, the study selected informal settlements located in the North-Central, South-Central and Mid-West functional regions. Challenges encountered in the provision of AURL, the development of low-income housing and the improvement of informal settlements;.
Data Analysis
Concept Definition
- Informal Settlement
- Affordable Urban Residential Land
- Low-income Housing
- Urban Land Market
Low-income housing is generally provided at low or sub-breakeven costs and below market levels (Disney, 2007). In the context of this study, low-income housing is considered to include the housing options listed above, along with a broader range of housing options that do not meet minimum settlement standards.
Chapter Summary
Introduction
Central Argument
The second theme therefore focuses on the development of informal settlements by the urban poor in response to the shortage of AURL and low-income housing. These approaches fail to remove barriers in the urban land market that impede the delivery of AURL and low-income housing.
The Shortage of Affordable Urban Land and Housing
As a result, both topics fuel a wide-ranging debate on the lack of AURL and low-income housing, and this chapter captures and elaborates on some of the main axes of this debate. Despite a broad consensus that there is a severe shortage of AURLs in the country, a solution to the problem remains elusive.
Understanding the Market
- The Theory of Liberal Markets
- The Theory of Market Failure
- The Theory of Relative Deprivation
- The Distinct Nature of Housing
In the public sector, the provision of housing is seen as a service aimed at specific measurable needs of the urban poor. Low-income households' access to housing is hampered by land and housing market imperfections.
Confronting the Market System
Individual Reactions to Unjust Distribution
The urban poor articulate this confiscation as a way to realize the right to inhabit the city. Inadvertently, this lending strategy has effectively priced the urban poor out of the “self-help” market.
Democratising the Market System
- The Theory of Democracy
- The Theory of Equity
- The Theory of Utilitarianism
- The Theory of Communitarianism
- The theory of Cooperative Game
A discussion of the theory of relative deprivation helps elucidate the processes leading to uprisings and anarchist actions that the urban poor use to gain access to land. Therefore, the next section focuses on the theory of utilitarianism, which proposes to solve the unfair distribution of resources to maximize the well-being of the majority in society.
Financial Mechanism for Delivering Affordable Urban Land
When negotiating a possible exchange of interests or rights in land and land-related resources, the two actors (current and potential users) assess the values of the profitability or utility derived from its use differently. The proposed model seeks to create a mix of housing options, where the dominant tenure is determined by the location of the planning site in the city.
Determinants of Housing Affordability
The envisaged model could guide public sector involvement in ULM by evaluating the mechanisms through which urban land is supplied, valued, financed and sold for housing development. However, these households are more likely to have many members as a source of labor for the various livelihood strategies pursued by the household.
Approaches to Measuring Housing Affordability
The measure takes into account economic, environmental, spatial, social and physical health problems of low-income households. Therefore, low-income households make trade-offs between the housing they want and what they can afford to pay.
The Framework for Assessing Land Affordability
What Counts as Affordable?
In large-scale low-income housing, as in the cases of Dakar (Senegal), Dar es Salaam (Tanzania), Harare (Zimbabwe), Lusaka (Zambia), Manila (Philippines), Mumbai (India) and Nairobi (Kenya). ), major location problems are common and a source of highly hidden non-housing costs (Campbell, 1990; Keare & Parris, 1982; Harris, 1972). Low-income households make personal choices about residential location based on proximity to jobs, amenities, and public transportation trade-offs.
The Framing of Affordability
Given the conflicting concepts of affordability, understanding why the urban poor choose to reside in certain locations is a critical part of assessing affordability and designing an AURL delivery mechanism. Designing a pricing mechanism that aims to deliver AURL similarly relies on establishing in advance the fundamental parameters of affordability—who will determine what is affordable, for whom, and how.
Chapter Summary
60 in this study refers to the suitability of the apartment to meet the specific needs of the family, in terms of size and layout. In this regard, the discussion further demonstrates the inadequacies of the neoliberal theory guiding the operations of urban land and housing markets and ultimately advances a set of propositions that led to the development of a pricing mechanism that could provide AURL for low-income housing. .
Introduction
Historical Land Dispossession, 1652-1950
Some trekkers led by Andries Hendrik Potgieter settled on the Highveld, while others led by Piet Retief settled in Natal (Feinstein, 2005; Thompson, 2001), where the Zulu Kingdom had been devastated and weakened by the Mfecane Wars ( Worden, 2007). and a savage civil war and mass emigration that followed the assassination of King Shaka (Lester, 1996). The effect of the provision of the 1936 Act and the policy of URS was very far-reaching.
The Urban Land Question
The Economic Context
The economic dimension of the urban land issue is inextricably linked to the strategy of allocating small plots of land to Africans on indigenous reserves that were subject to high taxes. The unfortunate economic conditions faced by the non-white population put the issue of urban land on the political agenda.
The Political Context
The lack of AURL for low-income housing has a radicalizing influence on the urban poor, who, through encroachment and illegal settlement in well-located urban areas, increasingly influence local government land-use decisions (Foley, 2009). The policy debate on expropriation of land without compensation explored questions of constitutional amendments and administrative changes that might be needed to assist in the delivery of AURL for low-income housing.
The Administrative Context
The urban land management system fails to balance the supply of urban land for high-income residential, industrial and commercial purposes and the supply of AURL for low-income housing by implementing reasonable constraints on the speculative behavior of private landowners (Barry & Taylor, 2008). ; Larson et al., 2008). These financial burdens push urban land prices beyond what the urban poor can afford, and most are pushed out of the urban land market.
Land Allocation in the Market
The Affordability Problem
As a result, landowners appear to withhold the supply of urban land to low-income households. Heavy cost burdens prevent low-income households from accessing urban land with a secure homestead.
Expropriation of Urban Land After 1996
Expropriation with Compensation
This physical expression of the need for affordable urban land for low-income housing strengthens the current case for expropriation of urban land without compensation. This call by the EFF started a national debate on the expropriation of urban land without compensation.
Expropriation without Compensation
80 However, other scholars disagree with this interpretation of Article 25, because it is a conservative interpretation of the Constitution. Nevertheless, Section 25(5) directs the state to take reasonable legislative measures to promote conditions enabling citizens to access urban land on an equitable basis (ibid).
Policy implications
Following the notion that housing is a 'bundle of rights', the question is how many or which of the sticks in that bundle could be taken by the state in the public interest without creating a right to compensation for the loss. The government needs to consider how it can expropriate various components of the package of rights.
Lessons on Affordable Land Delivery: The International Experience
- The Land Readjustment Strategy
- The Transfer of Development Rights Strategy
- The Guided Land Development Strategy
- The Land Sharing Strategy
- The Community Land Trust Strategy
Public policy makers in South Africa could learn from countries that have used land readjustment strategies to effectively rationalize neighborhood floor plans, land use patterns and land tenure arrangements. Thus, public policy makers in South Africa could learn from land sharing schemes in Bangkok how the municipality or civil society organizations, acting as mediators between squatters and private developers, managed to shape land sharing outcomes.
Chapter Summary
As a result, housing developers gain insight or understanding of the low-income housing market while remaining connected and responsive to their core constituency. Since the 1980s, land and housing policies have increasingly favored market-based solutions to the lack of AURL for low-income housing.
Introduction
Informal settlements in South Africa are the result of both explicit apartheid policies and decades of official indifference. In particular, informal settlements are excluded from municipalities' planning and budgeting processes, ignoring their existence and the dangers they pose to humanity.
Apartheid Housing Interventions
The apartheid government's response to informal settlements was to adopt a strategy of demolishing and clearing these settlements and relocating their inhabitants to the urban outskirts. Therefore, even though informal settlements are tolerated by the post-apartheid government as a form of housing that the urban poor can afford, they are still considered illegal because of the unconventional processes used in their development.
Conflictual Perspectives on Informality
Conventional perspective
95 Urban Foundation (1991), informal settlements grew exponentially in the early 1990s as the urban population living in backyard shacks moved out and established more informal settlements. Given the severe housing shortage, such an attempt to prevent low-income households from establishing informal settlements was futile and akin to trying to sweep the ocean tide with a broom.
Class-based perspective
According to Saff (1998), homeowners believe that it is inappropriate and unacceptable to build informal settlements in or near middle to high income areas as this would increase crime, reduce property values and harm the environment in those areas. areas would be affected. Middle- to high-income households invest in affluent neighborhoods to reap the economic benefits of a market-based system and therefore argue that the presence of informal settlements erodes these investments.
Non-conventional perspective
Second, they disagree on what mechanisms facilitate easier access to affordable housing with flexible tenure arrangements, as the urban poor view renting as more flexible than ownership. The urban poor prefer to be close to jobs and amenities, even though such locations may expose them to floods, fires, landslides, and other hazards.
Causes of Informal Settlement Development
In the context of a very limited supply of low-income housing and high transportation costs, residents of informal settlements are justified in locating their housing in pockets of urban land near employment opportunities. While its achievement is evident, the rate of need for low-income housing remains far greater than the rate of supply, so the growth of informal settlements continues to grow rapidly.
Spatial Distribution of Informal Settlements in South Africa
Therefore, it is important for this study to understand what factors limit housing affordability among low-income households in the study area. If housing affordability is seen as a market problem, this means that there is room for public intervention in the direct supply of housing (Linneman & Megbolugbe, 1992).
Intervention Strategies
- Product-type Strategies
- Reduction of Building Standards
- Housing Delivery Mechanisms
- Informal Settlement Upgrading
This would help the researcher design a mechanism that could deliver AURL to low-income housing. The wet-core option was conceived as part of the sites-and-services model for the delivery of low-income housing.
The Case Study of eThekwini Municipality
Historical development of Informal Settlements in eThekwini Municipality
In the 1970s, informal settlements began to grow again, mainly in the form of clandestine settlement close to townships (Morris & Hindson, 1997). The tension created by such diversity fueled growing violence and instability in informal settlements, particularly in the late 1980s and early 1990s (Morris & Hindson, 1997).
Factors Impacting on Housing Affordability in eThekwini Municipality
The ability of low-income households to afford housing depends largely on urban land and construction costs. Low-income households face housing affordability challenges, especially when trying to access network infrastructure services.
Spatial Distribution of Informal Settlements in eThekwini Municipality
The Outer West region has the second largest concentration of informal settlements in the metropolis. The North Central Region has the fourth largest concentration of informal residents in the metropolitan region; approximately 35 percent of the urban population lives in informal settlements.
Chapter Summary
The three study sites were selected from Ward 31 in the North-Central region, Ward 32 in the Inner-West region and Ward 34 in the South-Central region based on the sampling procedure discussed in section. Work, education level, household income and household expenditure have a significant influence on housing affordability in the selected research locations.
Introduction
To assess housing affordability among households in informal settlements on Lacey Road, Havelock Road and Sir Kumar Reddi Road, the researcher uses themes that describe the relationship between household income and urban land value, tenure arrangements, housing location, quality of housing and family size. . From these themes an argument is built citing housing affordability challenges that are responsible for the continued growth of informal settlements to motivate for an alternative mechanism of providing urban land at prices that the urban poor can afford.
Assessing Housing Affordability
Affordability and Household Size
Characteristic Frequency of Informal Settlements Percentage Cumulative Percentage Lacey Road Havelock Road Sir Kumar Reddi Road. The size of the 128 households of 2.6 persons in the informal settlement on Havelock Road was below the average of the informal settlements on Lacey Road and Sir Kumar Reddi Road.
Affordability and Household Expenditure
The results shown in Table 5.7 indicate that about 56 percent of households in informal settlements on Lacey Road, Havelock Road and Sir Kumar Reddi Road were able to contribute R200 to R1,600 of their income towards the purchase of a residential plot . 133 The results in Table 5.10 also show that between 68 percent and 71 percent of household heads in informal settlements on Lacey Road, Havelock Road and Sir Kumar Reddi Road were employed.
Affordability and Housing Location Choice
The results in the table show that approximately 21 percent of households in all three settlements were engaged in informal business activities. The results also show that approximately 95 percent of households living in these settlements lived in eThekwini Municipality in 1994.
Affordability and Tenure Arrangements
In the absence of empirical evidence of the effects of limited housing affordability on housing conditions and human health in informal settlements, implicit assumptions and myths flourish (ibid). Therefore, it is important for this study to present empirical evidence linking limited housing affordability with poor living conditions.
Affordability and Quality of Housing
The results in Table 5.22 suggest that all households in the Lacey Road informal settlement were directly connected to the municipal electricity grid (see photo 5.3 on page 143). The results in this table show that all residents of the informal settlement on Havelock Road and 94 percent of residents of the informal settlement on Sir Kumar Reddi Road had access to electricity through illegal connections (see photo 5.4 on page 144).
Assessing Affordable House Prices
The study calculated the price of housing that low-income households could afford based on the assumptions shown in Table 5.24. Monthly mortgage payment equal to or less than 30 percent of monthly household income. No down payment – the mortgage would cover 100 percent of the purchase price.
Discussion of the Results
- Affordability and Market Pricing Reality
- Affordability and Household Expenditure
- Affordability and Household Size
- Affordability and Housing Location Choice
- Affordability and Quality of Housing
- Future Direction of Research on Housing Affordability
- Summary of Study Results
As a result, South Africa is facing a low-income housing crisis (Pillay & Naudé, 2006) with the current backlog of low-income housing estimated at over 400,000 units (eThekwini Municipality, 2018). Overall, the results of the study do provide new insights into the affordability of housing among low-income households.
Chapter Summary
The study's investigation of the pricing mechanism for urban land and its impact on the location and quality of low-income housing in urban areas established a causal link between severe housing stress and AURL shortages. This strategy could provide AURL for low-income housing in urban areas where informal settlements are often abundant near employment opportunities.
Introduction
Synopsis of Research Objectives and Research Questions
These last two chapters also reflect on the impact of the market activation approach on housing affordability and demand issues affecting informal settlements in South Africa. The study therefore concludes that the conventional mechanism of determining market prices is inadequate, because.
Alternative Land Pricing Mechanism
Derivation of the Formula to Calculate Affordable Land Price
Therefore, the study determines the market value of the land occupied by the informal settlement at Lacey Road using the comparative valuation method. The valuation professionals estimate the value of the 2.37 hectare plot of land occupied by the informal settlement on Lacey Road at R49,177,500.
Contribution to Knowledge
The model proved that if land is valued at 0.09 percent of income, it is affordable for the urban poor. The results of this research study demonstrate that it is possible to provide an AURL for low-income housing if the land price is assessed at a 0.09 percent of income scale.
Recommendations for Delivery of AURL in Inner-City Areas
Restructure the Land Administration System
Taxation of vacant urban land in inner-city areas is required to support the distribution of AURL for low-income housing. However, the municipality must only sanction an urban land transaction in inner-city areas if the land sale price is set at a benchmark of 0.09 percent of household income.
Efficient Release of Affordable Urban Land
Under this tax incentive, vacant urban land in inner-city areas could be taxed heavily so that speculative landlords could be forced to develop their land for low-income housing or sell it to low-income households. low at a comparative price of 0.09 percent of their household income. Vacant land in inner-city areas should be reserved for low-income housing only, and land prices in such areas should be set using this benchmark.
Chapter Summary
It is relevant to emphasize that the neoliberal housing policy in South Africa fails to tackle the huge shortage of AURL and low-income housing. 174 clearly shows that the neoliberal land policy fails to deliver AURL for low-income housing.
Location of eThekwini municipality in KwaZulu-Natal province, South Africa
Informal Settlements within the 10km Radius from the Durban City Hall
Location of Sir Kumar Reddi Road informal settlement in Clairwood Township, Durban
Location of Lacey Road informal settlement in Sydenham Township, Durban
Location of Havelock Road informal settlement in Greenwood Park Township, Durban
Areas in eThekwini Municipality experiencing rapid informal settlement in the 1980s
Administrative Functional Regions of eThekwini Municipality
Distribution of Informal settlements in eThekwini Municipality, 2016
