The state must prioritise a residential housing construction programme

COMMENT

Over the past 112 days under the Covid-19 lockdown, South Africans have spent an average of 70% to 80% of each day indoors. The home is not just a place for shelter, but our office, exercise space, playground, classroom and more. The home is our everything. 

For the fortunate 35% of South African’s population, this has been a reasonably comfortable and secure living experience. The same cannot be said for the remaining 65% who live in rural housing, township houses and informal structures. The experience during the lockdown has brought into focus the need for better housing and home ownership. 

Housing is a national imperative in South Africa’s transformation and development agenda. It must be a major part of the development plan to rebuild the economy in the post-Covid-19 era. Decent shelter is a basic human right and is needed to restore the dignity of its people and rebuild the economy.     

To reinvigorate the economy, the government needs to embark on a residential housing infrastructure development programme. The initiative would aim to promote job creation in the construction sector, small business owners in the form of artisans, while buying material and sourcing labour locally.  

Housing development is a value driver to long-term nation building, but it must be well understood and planned for. For example, the perception of what drives value in property is not as linear as location. If this were true, then the people living in Alexandra and Sandton would command the same values for their homes. Rather, it’s about understanding that properties gain their intrinsic value from the ecosystem that develops around them — hospitals, schools, shopping centres and so forth. The proximity and interconnected network of these amenities is what gives the housing its true value. 

Therefore if the government commits to residential development, it will be investing in long-term growth and development, as saleable assets that can be the wealth base.   

There are several pragmatic steps to achieve this feat. For example, by expanding the government subsidy programmes, such as the finance linked individual subsidy programme (FLISP), at a funding and as stakeholder level. 

The difficulty with a well-intended subsidy scheme like this is that it has been disconnected from key stakeholders — residential developers and institutions — who can unlock the funding opportunity for citizens. This limits its ability to be formally a part of the established process of applying for a home loan through the banking system. The FLISP programme should be designed to include the construction sector and lending institutions in an integrated value delivery system. This will ensure end-users are not burdened with the task of having to apply for subsidies separate from the process of applying for housing finance. 

In addition, one could explore alternative building methods that use low-cost materials and space-saving designs, to speed up the rate of delivery. For example, prefabricated material has been effective for commercial and residential buildings. Pre-fab is more affordable than bricks-and-mortar buildings and enables effective spatial home designs.  

The backlog for housing is more than 500 000 units and the demand grows daily. Increased accessibility to housing subsidies, acceptance of alternative building materials and the opportunity to create jobs makes a strong case for sustained economic and social development.  

For the economically inactive population, a free, decent housing programme is an opportunity to be part of a renewed broad-based black economic empowerment conversation. Decent housing is an asset base for previously disadvantaged families.