​The state must invest in rental stock for people earning less than R3 200 a month

The New Europa in Hillbrow caters for some of Johannesburg's low-income community, with 58 communal units and 14 self-contained bachelor units. It is run by the Madulammoho Housing Project. (Oupa Nkosi, M&G)

The New Europa in Hillbrow caters for some of Johannesburg's low-income community, with 58 communal units and 14 self-contained bachelor units. It is run by the Madulammoho Housing Project. (Oupa Nkosi, M&G)

No formal rental options exist, public or private, in high density urban areas for people earning less than R3 500 a month.

Most of the state’s efforts to develop or facilitate rental housing have served households with incomes of between R3 500 and R15 000 a month.

The state’s ownership subsidy programme is directed at households earning less than R3 500 a month but it does not meet the scale of need. Nor does it address the existing needs for rental accommodation.

Instead, these households live informally in dilapidated inner city buildings, shared or sub-let rooms or rent in backyards in townships, suburbs and informal settlements.

People face eviction by private developers or municipalities in processes of regeneration or gentrification in inner city areas.

When alternative accommodation is provided, households face displacement to shelters on a temporary basis. This temporary accommodation generally becomes long term.

Nationally, a combination of strategies is required to address the housing needs of households earning below R3 500 a month.

A public rental housing programme is one of them.
RDP housing delivery, private rental and temporary alternative accommodation for voluntary relocation are others.

The Socioeconomic Rights Institute’s (Seri) newest research publication, a Policy Brief on Affordable Public Rental Housing, makes the case for why this programme is required and offers four principles to shape it:

  • Affordable rental charges;
  • Rental tenure;
  • Different types of accommodation; and
  • Public ownership of housing stock.

Innovative solutions, developed in partnership with tenants, are needed to bring down the monthly charges, especially for tenants with household income below R3 200 a month.

An affordable maximum monthly rental, including service charges, is R800 or less.

Using 2011 census results Seri estimates that nearly half of the households resident in Johannesburg’s inner city fall into this income category, and that the picture for the country is similar.

Rental tenure is a flexible form of tenure better suited to many inner city households for whom mobility is an important livelihood strategy. Many inner city households are renting, albeit informally and often in insecure and overcrowded conditions.

Units should be developed to accommodate a range of household structures – single people, couples with children, single parents with children and relatives sharing accommodation in family groups.

The principal of public ownership seeks to transfer, through ownership subsidies, capital assets to poor households.

The public rental option is for the government to invest in, and maintain, accommodation as a state asset. The objectives are to expand state capacity to respond to the needs of the poor and to strengthen state infrastructure and resources.

Seri’s policy briefs are informed by the experiences of our clients in different contexts in South Africa, the implications of research findings and its litigation experiences.

In the case of public rental housing, Seri addresses four aspects of the proposed programme: up-front capital costs, ongoing operating expenditure, availability of building stock and the management model.

The state’s Community Residential Unit programme – which looks at hostels, among other buildings –  is an ideal funding instrument for the public rental housing programme. Alternatively, a customised national funding instrument should be developed.

A number of possibilities exist to bring rental charges into the affordable range, which should be used in combination with each other.

  • The benefits of free basic services and discounted rates need to be passed on to tenants;
  • Municipal operating subsidies, a new national demand-side subsidy instrument; and
  • In-kind tenant contributions (for example, cleaning and maintenance) should be explored.

A number of different management models are possible, including:

  • Not-for-profit management by a nongovernmental organisation of municipally owned stock; and
  • Municipal entity management (such as the Johannesburg Social Housing Company) of municipally held buildings.

In either of these examples however, management should be undertaken in terms of a clear municipal mandate to act on behalf of the municipality and in accordance with the objectives of the proposed new programme.

The availability of buildings to supply the proposed programme with stock is a prerequisite for the programme to work. Expropriation is a viable means of acquiring public ownership of inner city buildings.

Without affordable public rental supply, we will see more informal settlements, more overcrowding and more people living in “bad” buildings. None of this is in the interests of government, developers and the people who have to live there.

Lauren Royston is the director of research and advocacy at Seri.

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