Keeping a lid on housing shortfall
WITH the percentage of South Africans living in squatter shacks remaining static over the past three years at 11%, it appears that government and private sector efforts to alleviate the severe housing shortage are at least keeping the problem at bay.

The percentage has remained steady despite population growth and high urbanisation rates.

Nevertheless, according to research conducted by TNS Research Surveys on behalf of the FinMark Trust, a lot still needs to be done before SA starts making real headway.

The survey shows that 11% of the population is still living in squatter shacks — the same percentage as in 2004. According to the survey, 14% of the black and 2% of the coloured population live in shacks .

Neil Higgs, director: innovation and development at TNS Research Surveys, says the fact the percentage of the population living in shacks has remained static indicates a lot of low-cost and affordable housing is being brought to the market, because the population is increasing.

“It’s keeping the problem at bay but not eating into the figure. A lot more work is needed to clear squatter camps,” says Higgs.

Private-public partnerships are essential in delivering houses. “We need more developers to enter the (low-cost housing) market and the government has to ensure it is spending the money (for housing delivery) timeously.”

He says only developments that deliver large volumes of houses can alleviate the kind of housing shortage SA faces.

David Wentzel, CEO of RBA Housing, which specialises in the affordable housing market where properties cost R250000-R700000, says the survey figures “sound very realistic ”.

“With the government wanting to eradicate informal settlements by 2014, those people living under those conditions will have to be accommodated in low-cost, fully subsidised housing.” Low-cost housing refers to units costing up to R40000 and fully subsidised by government.

Wentzel says people living in shacks are usually either moved to low-cost, fully subsidised housing or to credit-linked units costing R400000-R250000. The credit-linked units usually involve a subsidy, as well as a loan from a financial institution.

He says people living in subsidised, credit-linked units will in time move into the affordable housing arena, where units cost R250000-R700000.

Mixed-income development, such as Cosmo City in Johannesburg, is the route to take if SA is to meet the government’s target of eradicating informal settlements by 2014. Cosmo City comprises low-cost, credit-linked and affordable housing.

Wentzel says there are 2,2-million families that still need housing. “Of that, 650000 are in the affordable housing market.”

Corne Kruger, CEO of mass housing group Sea Kay Holdings, which listed on the JSE’s main board last week, says that apart from the national housing department’s vision of eradicating shacks by 2014, it also wants integrated, sustainable human settlements that incorporate people of different income groups.

“They don’t just want uniform RDP (reconstruction and development programme) settlements. They want a settlement that includes a combination of income groups up to R10000 and above. They want to build schools, clinics and also have a high level of services,” says Kruger.

He believes the financial services charter, in terms of which banks have agreed to deliver R42bn worth of financing for affordable housing by the end of next year, will play a big role in eradicating squatter settlements.

“In the past, no one catered for households earning R3500-R10000 a month. All those people stayed behind in squatter camps because they did not qualify for bonds or for RDP houses. This created a big cap and the financial services charter is now catering for this, with the banks agreeing to spend R42bn by the end of 2008 and a further R42,5bn by 2013.”

He says mixed-income developments such as Cosmo City will go a long way to eradicating squatter camps.

Other good examples of the kind of developments that are needed are the R400m Olievenhoutbosch Ministerial Project, a joint housing project between Absa and the government, and First National Bank’s Delft Symphony housing project in Cape Town.

Article by: Nick Wilson - www.businessday.co.za