Estate Living Magazine Develop - Issue 44 August 2019 | Page 22

I N V E S T
&
d e v e l O P
HOME
GROWN
By some estimates, South Africa has a housing backlog of about 2.3 million, and that number grows
by about 178,000 houses a year. Despite the country’s sophisticated banking system, busy property
market, generous impact investment projects and advanced construction industry, neither the
public nor private sector has been able to catch up that backlog.
Dire situation
A lot has been said and written about South Africa’s housing crisis,
and about the affordable housing solutions (some successful,
others not) that hope to solve it. But amid all the noise, there’s
a bewildering lack of clarity about the extent of the problem, its
causes, and the implications of leaving it unsolved.
In 2018, according to Statistics South Africa’s latest General
Household Survey, some 81.1% of the country’s households lived
in formal dwellings. But, while the percentage of households
that have received some kind of government subsidy for RDP
housing has increased from 5.6% in 2002 to 13.6% by 2018, there
were still 13,1% of households living in informal dwellings. Dig
deeper into the 2018 and 2017 surveys, and you find concerns
raised by residents about the quality of those subsidised RDP
houses: 10,2% of them said the walls were weak or very weak,
while 9,9% rated the roofs of their dwellings as weak or very
weak.
Despite putting a roof over the heads of 13.6% of South Africa’s
households, the RDP programme has both failed to keep pace
with demand, and failed to deliver quality affordable housing.
The Department of Human Settlements has even rebranded the
project, renaming the RDP housing plan ‘Breaking New Ground’
(BNG). According to public interest news site GroundUp, the
Department ‘wants to integrate different types of housing –
rented, bought and subsidised – and provide facilities like
schools, clinics and shops, to improve the quality of people’s
lives. BNG houses are supposed to be larger than RDP houses,
with two bedrooms, a separate bathroom with a toilet, shower
and hand basin, a combined kitchen and living room area, and
electricity installation, where electricity supply is available in the
township.’
Serious problem
But no matter how often you paint the walls or provide subsidies,
the housing crisis ultimately boils down to affordability. Even
with government subsidies, houses are simply too expensive for
the vast majority of the population.
According to the South African Affordable Residential Developers
Association (SAARDA), in 2018 the cheapest newly built house
in South Africa cost about R352,500. ‘Under these terms, the
house would be affordable to only 34.4% of urban households.
Low household incomes, poor credit records limiting access to
finance, rising building costs, and scarcity of affordable, well-