cost housing?
Mail & Guardian reporters
The first official figures for new housing for the poor show a massive gulf between the government’s boasts to the electorate and the reality for South Africa’s homeless.
The information, which the Department of Housing has so far kept under wraps, shows that fewer than 200 000 low-cost houses – a fifth of the government’s target for 1999 – have been built since 1994 under the government’s housing programme.
Few of the houses are funded with bank loans, meaning most of the structures have been built with government housing subsidies – a maximum R17 500, which in many cases has bought just a foundation and drainage.
Minister of Housing Sankie Mthembi- Mahanyele has put a positive spin on the figures, counting houses under construction to take the tally to nearly 450 000 since 1994.
But the building industry says most of these “under-construction” units are little more than bare foundations. Builders are now calling on the government to scrap the agreement it made in October 1994 with the industry and banks to propel low-cost housing.
“We need to focus on what’s gone wrong,” says Building Industries Federation of South Africa executive director Ian Robinson. “It’s a far more depressing picture than the ministry is suggesting. They’re kidding themselves if they think they’re going to be able to produce politically acceptable results.”
The National Housing Forum Trust, an influential non-governmental organisation, says Mthembi-Mahanyele is doing well “under the circumstances. But many of these houses are barely habitable,” says national co- ordinator Khadija Richards.
The stakes are high for the government. The provision of low-cost housing has been a central component of its portfolio, and its performance will be closely scrutinised in the run-up to next year’s election. If it fails, Mthembi-Mahanyele could come under pressure to scrap the subsidy system underpinning the programme, and start again.
The agreement her predecessor, the late Joe Slovo, produced in October 1994 sought to stitch together a policy in which business would develop low-cost houses, with the government providing housing subsidies, and various agencies, such as the Mortgage Indemnity Fund, carrying the risk for defaults.
People earning less than R3 500 a month qualify for the subsidy, which starts at R5 000 and goes up to R17 500 – depending on criteria such as the applicant’s earnings, access to the housing site and ground conditions.
The idea was to give the homeless a base on which to build, a strategy called incremental development. All parties to the agreement have frequently bickered since 1994 about delivery problems.
In Parliament last week Mthembi-Mahanyele publicly backed down from the African National Congress’s one-million target set in 1994, blaming a lack of funds – despite her department’s reputation for regularly failing to spend its annual budget. She said the target will be met “at a later date, subject to the availability of resources”.
The department spent R1,2-billion on housing in the 1996 financial year, and is expected to have spent close to R2,2- billion in the current financial year. Its statistics suggest that even a massive cash injection would be unlikely to bring the government back on target.
The figures, compiled with a new computer programme that draws data from all nine provinces, show that 235 709 houses have been built since 1994.
But close to 40 000 of these were projects initiated by the previous government. Gauteng is out in front with 55 210 houses built, followed by KwaZulu-Natal with nearly 43 000 and the Western Cape with more than 38 000.
However, nearly half KwaZulu-Natal’s projects were initiated under the National Party, and around 40% of those credited to the Western Cape were drawn up by the old House of Representatives. The Western Cape confirmed this week that none of these projects had targeted the black homeless in the province.
National housing figures also show about 212 700 houses are under construction, but there is a wide range of opinion in the industry about what this actually means. Robinson says the industry’s own experience suggests less than half of these units include top structures such as walls.
The gap between Mthembi-Mahanyele’s claims and her department’s statistics has fuelled fears that the figures are, in the words of one development academic, being “tortured until they confess”.
The breakdown between houses built, houses under construction, subsidies approved and subsidies allocated gives politicians ample room to distort the true picture.
Until last year, the department had little grasp of how many houses had been built or were under construction. A senior executive at one of the top construction firms, who declined to be named, says the housing department “can’t on any given day say how many houses are built or being built – in fact they don’t want to say, because it would not be politically palatable”.
The head of the department’s housing project task team, Brian Monteith, says the department now has accurate figures to hand – thanks to a computerised system linking up all nine provinces.
Monteith says many of the first houses built under the government’s subsidy scheme were little more than “toilets on slabs of concrete”, but more recent projects are more sophisticated.
Richards adds that many developers are carving out “innovative” funding schemes, so the subsidy may actually pay for a complete structure – albeit a tiny one.
Monteith says in some provinces, like Gauteng and Mpumalanga, contractors are managing to build houses of up to 36m2 within the constraints of the subsidy. Such structures are usually found in areas where the ground is solid, allowing contractors to spend a bit more on walls and roofs.
He says he has been “pleasantly surprised” by the quality of houses now being built, though he warns there are still some profiteering developers who produce shoddy structures.
Innovative building, however, is unlikely to entice the banks back in. The Council of South African Banks says its members are reluctant to lend to most of the homeless the government is targeting.
“There’s a limit to how far we can go,” says the council’s low-cost housing representative, Lance Edmunds. “Banks can’t lend to people earning R800 a month.”
Industry figures suggest the banks have helped fund just 15% of the houses built since 1994. They have lost close to R1,6- billion on defaulted loans in the sector in the same period. “The banks feel they’ve been philanthropic enough,” Richards says.
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