No More Mahala-Housing On the Cards

Following our article in which we reported the African National Congress (ANC) has released its policy document on land reform for its branches to discuss and make input ahead of its policy conference. There is another proposal on the table.

This time around the ANC is proposing to bring on board the Central Bank (CB) and South African Revenue Services (SARS) to provide special interest rates and tax incentives to beneficiaries of state housing, a potentially radical policy overhaul aimed at shifting the focus from the provision of free mass housing to encouraging citizens to build their own homes.

This system is working in parts of the Western Cape and Gauteng.

In 2020 Department of Housing and Human Settlement ordered provincial governments to downscale free housing projects.

Service sites, where people can build their own homes, will be preferred.

But why is the ANC pushing this and what are the advantages?

At least the quality of houses will improve and this will create employment for many South Africans.

This will effectively end South Africa’s policy of providing free houses for the poor.

The new strategy will still involve government support for medium and high-density developments, and existing contracts will be honored. Other than that, though, the housing subsidy program has been deemed financially unsustainable in light of the Covid-19 pandemic’s impact – and contracts to build new housing projects have been frozen.

Instead, the focus will be on hand-over serviced sites where people can build their own homes.

In 2019, the human settlements said it would deliver 470,000 housing units, 300,000 service sites, 30,000 social housing units, and upgrade 1,500 informal settlements. It only managed to develop 126 informal settlement upgrading plans.

The total housing backlog across the country is estimated at 2.6 million units.

“We can confirm that provincial departments are being engaged to revise their business plans to respond to the current financial difficulties as a result of Covid-19,” said human settlements spokesperson McIntosh Polela.

The department “had to come up with innovative ways of ensuring that people have decent shelter over their heads,” he said.

“One of these innovative ways is to upscale the provision of serviced sites to enable people to build houses for themselves.”

The change has left developers involved in government projects anxious.

“That is very worrying for us because we’ve got one or two contracts pending and we’re completely in the dark,” said John Mathews, one such developer.
“There’s a lot of planning that goes into a development like this and now we don’t know whether the project is going to be approved or not.”

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