Ronald Eglin

Is the national housing budget getting too big?  If you were Trevor Manuel in charge of the national budget, having to take into account all the pressures from the different departments for more of the national budget pie, would you increase the budget slice for housing?

The current existing housing policy (2004) also referred to as Breaking New Ground (BNG), has as one of its objectives the achievement of ‘sustainable human settlements’. The document is not very clear as to what is meant by sustainable human settlements, but note 6 on page 6 provides quite a clear vision of what is meant by this term.

“The present and future inhabitants of sustainable human settlements located both in urban and rural areas, live in a safe and secure environment and have adequate access to economic opportunities, a mix of safe and secure housing and tenure types, reliable and affordable basic services, educational, entertainment, cultural activities and health, welfare and police services.”

In the section on “Enhancing the location of new settlements” of BNG, it is stated that “The location of housing projects has been criticized as reinforcing apartheid spatial settlement patterns. The objective of spatial restructuring demands a more decisive intervention in land markets.”

The BNG goes on to suggest that there is a need to move away from a housing-only approach towards the more holistic development of human settlements, including the provision of social and economic infrastructure.

From observations of what type of settlements are being created at the moment in the country, housing still generally tends to be located on the edge of settlements with the poor still unable to afford well located land. The settlements that are created still do not have adequate educational, health, police and other services and facilities.   Most poor households cannot afford to live in the houses that are built, thus, the settlements being created are still not in line with the vision for sustainable human settlements.

Carrying on with more of the same, in terms of providing more housing subsidies will not make settlements more sustainable as defined in BNG. The way that sustainable human settlements are created needs to be looked at in a totally new way.

Most people can, as individuals, households or as part of small community groups, arrange houses for themselves. They have been doing this since time immemorial.  The problem is that often the land on which these houses are built is not in the best place (it is far from jobs and facilities, on steep slopes, etc.), or the people do not have the authority to build houses on this land (they have invaded the land). Better quality land is too expensive for them. Households and community groups are not able to provide schools and clinics for themselves, without government support. Many households have to eke out a living using survival strategies, like cultivating fruits and vegetables. Many want to work but don’t have the resources, skills and marketing contacts to establish viable businesses.

Instead, the government should focus on helping people get good serviced land, with access to appropriate community facilities and spaces. The state can also increase its small business support strategies such as providing access to small business start up grants and loans, increased small business skills training, access to affordable and good locations from which to construct small business activity, and advice and support in marketing and linkage into the broader economy.  With improved incomes people will be more able to support themselves in creating decent houses.

From a housing point of view, there will still be a need for more direct support to the destitute, disabled, child-headed households etc. through the construction of starter housing units.   For the majority however, they will be able, with some assistance, to provide decent housing for themselves. This assistance includes, for example, assisting with bulk buying arrangements to keep material prices down, providing skills training to local builders, advice on appropriate house designs, and other support methods.

This is a radical departure from the way people think about housing and sustainable settlements at the moment.  It will require a shift in national government budget priorities from housing to land, education, health and other community services and small business development.

There will be resistance from those involved in the housing sector and it is unlikely that such a shift in budget priorities will happen overnight. One way to work towards such a realignment of priorities would be to stop increasing the housing subsidy each year in line with inflation. The savings made from this can then be channeled towards these new priorities.

Another way to realign budget priorities would be to increase the budget of the Neighbourhood Development Partnership Grant (NDPG) administered by the National Treasury which has as part of its objectives the promotion of economic development in poorer residential areas through the development of education precincts, libraries, multi-purpose halls, informal trading areas, etc.

If the national budget allocation for housing for 2008/9 of R10.59 billion was split four ways this would provide about R2.5 billion that can be used for each of the following:

• the purchase of about 83 000 additional land portions assuming R30 000 per plot for land, services and transfer costs;
• the construction of about 830 new schools assuming it costs R3 million to build one school; and
• the provision of 25 000 additional small businesses support packages assuming R100 000 per small business package (grant and business training).

The remaining R2.5 billion will be for housing the destitute and other housing support interventions.

The present emphasis on predominantly using the housing subsidy to try and create sustainable human settlements needs to be reviewed. A new emphasis on improving the way land is made available for settlement development, the provision of more appropriate schools and other facilities, and increasing the amount of support to small businesses and job creation strategies will potentially have a far more significant impact in creating truly sustainable human settlements.

The Transformer Vol. 15 No. 1 / February - March 2009