The Department of Housing is to collapse the current housing subsidy system and provide a full housing subsidy of R25 800 for the “hardcore poor”, which includes the unemployed and the elderly.
The new plan — accepted by the Cabinet on Wednesday but presented to the media on Thursday by Minister of Housing Lindiwe Sisulu — aims to “obliterate” informal household structures within 10 years. At present, there are 2,4-million households living in informal structures around the country, with 800 000 on housing subsidy waiting lists.
The government says it has delivered 1,6-million houses through the existing subsidy system in the 10 years since democracy. This Sisulu described as “no mean feat”.
Those households earning R1 500 a month or less stand to get a full subsidy of R25 800. Those in the R1 501 to R3 500 a month band will also get the full subsidy but the household must be committed to pay certain “sweat equity” — in building the house — or to making a down payment as part of the commitment to their housing.
While Sisulu was at pains not to go into what she described as “the nitty-gritty” of the cost of the new plan, she said it will be contained in the normal housing budgets.
The new plan is scheduled for implementation from April next year.
In terms of the existing system those earning less than R1 500 a month receive R25 800 but those in the next category, R1 501 to R2 500, get R19 000. Those in the R2 501 to R3 500 a month category receive R8 000.
Sisulu said that experience showed that in these latter two categories there is “little [one] can do” with that amount of money so it was decided that the categories should be collapsed and those earning up to R3 500 a month should access “the full subsidy”.
Those earning in the middle level of R3 500 to R7 000 will be assisted through contributions to the deposit required for mortgages. This is expected to be determined by provincial housing ministers.
Director General of Housing Mpumi Nxumalo said the role of the private sector will be enhanced through the collapsing of the subsidy bands as well as the removal of blockages relating to down-payments through converting subsidies into annuity-based systems — which could include even retirement annuities.
One of the key elements of the new housing plan is to reduce the period during which resale of subsidised houses is prohibited. This is currently eight years but it will drop to five years. — I-Net Bridge