Urgent policy reforms are needed to break the social housing backlog

President Cyril Ramaphosa’s hopes of delivering 37,000 new social housing units are likely to be dashed unless the current policy is reformed. The previous target to build 27,000 units between 2014 and 2019 fell short by almost 50%. 

The country cannot afford such poor performance, given the imperative to build more better-located, higher-density rental housing in cities. The social housing programme is one of the few policy instruments available to promote economic and social inclusion, and integration. Yet it currently receives only 2% of the overall human settlements budget. 

Improving the provision of affordable housing is not just a matter of spending more and speeding up the rate of development. At least three major reforms are needed if social housing is to achieve its potential for upward income mobility and spatial transformation.

First, over the years, the government has failed to link the value of social housing subsidies to inflation in the building industry. As a result, the real value of financial support has diminished over time. Delivery literally ground to a halt a few years ago after a decade of falling subsidies. 

A one-off inflation adjustment was made in 2017, which boosted confidence and brought forward new investment by social housing institutions (SHIs). A similar adjustment will be required every year to sustain a healthy rate of new housing development. 

The government could also revise outdated building norms and standards to allow for greater creativity, and innovation in affordable housing. Unit costs could be reduced without compromising the quality of living. Provincial and local government could streamline the system of regulatory approvals, and thereby facilitate new house-building.

Second, social housing delivery relies on capable institutions that can plan, develop and manage complex projects successfully. Although the number of SHIs has grown to over 100 in recent years, less than a third are currently managing projects. The rest need capacity strengthening to accelerate delivery. There have been some spectacular project failures in the past as a result of managerial deficiencies and poor relationships with tenants.

The Social Housing Regulatory Authority has tended to focus more on its mandate to regulate SHIs than to build their capacity to deliver and maintain successful projects. Training, practical support and mentoring should be offered in a more systematic and holistic way, recognising the variable needs of different SHIs. 

Partnerships with important non-governmental stakeholders such as NASHO could be a cost-effective way to professionalise the sector on a larger scale. Better capacitated SHIs will stand a higher chance of accessing external finance for their housing projects. Upscaling by leveraging private finance remains a major challenge facing the social housing sector. 

Third, social housing needs to receive more active support from local government and political leaders. Boosting affordable rental housing in well-located urban areas requires purposive action in the land market to achieve vital socio-economic objectives. 

Governments the world over-invest in the development of social housing in the interests of socio-spatial change and transformation. The justification for spatial integration in SA is compelling, given the damaging legacy of racial separation and denial of access to opportunities. 

Releasing strategically located public land parcels for social housing would send a powerful signal that the government is serious about urban integration. In fact, the provision of accessible public land will make or break the expanded social housing programme. 

Recent legislative changes (such as SPLUMA) recognise the critical role of land and provide a robust legal framework for local government to promote integrated planning and spatial change. What’s missing is the political will and determination to press ahead with implementation. 

Selected cities and government departments have demonstrated leadership in releasing public land for social housing, but other cities, provinces, national departments and state-owned enterprises lag behind. The government could demonstrate its commitment to redress the injustices of the past and unleash the energy and ideas of the housing sector through a more concerted programme of land release. DM

Professor Ivan Turok is executive director of the Economic Performance and Development Programme at the Human Sciences Research Council. Dr Justin Visagie and Dr Andreas Scheba are research specialists in the same unit.