News Letters

Big role seen for rental in SA's housing needs

CAPE TOWN — The government regarded the provision of rental housing as an important alternative form of tenure to help meet the housing challenge, Housing Minister Lindiwe Sisulu said yesterday.

She noted at the launch of a rental housing project that rental housing in SA was a far lower proportion of the total housing stock than in other developing countries.

“One of the major reasons why we lag so far behind in our provision of rental housing (is) the fact that developers do not see the development of new rental housing units for the low- and the middle-income sectors of our societies as an investment opportunity,” Sisulu said.

“They associate the sector with risks related to the nonpayment of rentals including the long-held perception that the sector is not profitable. Recent evidence indicates that they have only now begun to take an interest, albeit tentatively, due to rising house prices in the upper market.”

The minister said it seemed that only Johannesburg and Cape Town were on the radar screens of developers who were taking advantage of below market value property acquisition opportunities to focus on conversions and the refurbishments of existing buildings.

The government too had also not given the development of rental stock the priority it should have, Sisulu said.

Meanwhile, the confusion about which sphere of the government is responsible for social housing is addressed in a bill tabled in Parliament.

For 2006-07 to 2008-09, the government has earmarked R510m for social housing.

The bill assigns the national government the responsibility for creating and upholding a sustainable environment for social housing by instituting and financing a social housing programme.

Provincial governments will be responsible for administering the national social housing programme, including the approval and administration of grant funding.

Municipalities will be tasked with facilitating social housing delivery in their areas of jurisdiction whereas the role of the National Housing Finance Corporation in social housing will be to improve access to loan funding.

The bill defines “social housing” as rental or co-operative housing for low to medium-income households developed at a scale which requires institutionalised management. Social housing institutions or other delivery agents will use public funds to establish the housing in zones identified by municipalities.

The bill also provides for the establishment of a new statutory body, the Social Housing Regulatory Authority, which will regulate and accredit those social housing institutions reliant on public funds for their operations.

The authority will also administer and disburse capital and institutional grants, and conduct inspections of institutions to ensure that there is no maladministration and financial mismanagement.

Only accredited social housing institutions will be able to participate in the national social housing programme and will be bound by strict criteria, for example relating to corporate governance.

“The social housing sector is currently not being regulated by any dedicated legislation and this has complicated and impaired growth in the sector,” the memorandum to the bill stated.

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