Between the current 2021/22 and 2023/24 financial years, the allocated capital budget for City of Cape Town’s human settlement projects is approximately R3.3 billion in total. Of this, almost R2 billion is foreseen to be spent on formal subsidy housing, while approximately R1.3 billion is earmarked for informal housing and new accommodation types to address growing informality.
Over this medium term, more innovative and partnership-driven approaches will be vital as the demand for affordable housing in Cape Town, as in other cities in South Africa, is acute. New ways of delivering are required that do more with less, and draws in more partners from across the housing sector.
According to the City’s Mayoral Committee Member for Human Settlements, Councillor Malusi Booi, this R3.3 billion total capital grant funding for human settlements projects over the next three years will never be enough to address the need for affordable housing. The City is already spending almost all of the capital grant funding it receives for human settlements (2020: 98%). It is also receiving less and less grant-funding for housing, with national government cutting R118 million from our Urban Settlements Development Grant (USDG) last year alone. With the national financial situation continuing to decline, we need innovation, private sector partnerships and clarity on big policy shifts that are happening in the housing regime.
Read: Maintenance and upgrade work ongoing at City’s affordable rental units
In September 2020, the National Human Settlements Minister instructed all provinces that no new housing development contracts may be entered into for the time being without national government approval; that only existing contracts for housing projects over the next three years can proceed; that beneficiaries to be prioritised include the elderly (60+ years), the disabled, child-headed households and military veterans and qualifying beneficiaries. Lastly, that serviced sites are to be prioritised in 2021/22. It is vital that national government releases more details about this policy shift.
“As we’ve entered our new financial year, it is good to do a stock take of our past achievements. Since 2012, we’ve created more than 60 000 housing opportunities and transferred over 17 000 title deeds. Thank you to the dedicated officials, beneficiaries and partners. We are ready to tackle the challenge as a collective: As a society we are only all as strong as our most vulnerable neighbour. The City is positioning itself at the forefront of new interventions to increase the supply of affordable housing, while addressing spatial transformation and enabling liveable, integrated neighbourhoods across the city and we invite all in Cape Town to join us on this journey. It is in the best interest of all who live in Cape Town that all residents are accommodated in safer, healthier environments and the City’s new Human Settlements Strategy aims to enable this vision,” said the City’s Mayoral Committee Member for Human Settlements, Councillor Malusi Booi.
The City’s new Human Settlements Strategy aims to enable more affordable housing in these ways:
- increased support for small-scale builders in communities, known as ‘micro-developers’ to increase the supply of affordable rental housing
- incentives for the private sector to deliver affordable housing, including supplying state land to build on, and reducing development costs imposed by the state
- an Inclusionary Housing Policy that will incentivise the development of affordable housing in well-located areas by the private sector
- allowing faster housing development by simplifying and shortening approval processes under the City’s control, while pushing for necessary changes to national laws and policy
- innovative partnerships with Social Housing Institutions (SHIs) and other private sector players to deliver affordable housing
Context of current housing situation
- Covid-19 impact and the slow economic recovery in South Africa.
- Dire state of National Government finances.
- National budget cuts for human settlements.
- Rigid housing regime.
- Unlawful occupation placing pressure on resources and planned projects.
- Rising challenge of accommodation, especially for those earning less than R22 000 per month.
- The State, or a municipality, currently does not have the financial resources nor the availability of suitable land and capacity, to tackle the affordable housing need on its own. The City spent 98% of the capital grant money received for housing in the 2019/20 financial year. A fundamental shift is required and change in mind sets about affordable housing. New avenues must be followed to increase the supply of affordable housing as a matter of extreme urgency.
