R800bn needed to clear housing backlog

R800bn needed to clear housing backlog

South Africa needs at least R800 billion - and a 'miracle' - to clear its current housing backlog of 2.1 million houses within the next seven years.

This is according to the Finance and Fiscal Commission (FFC), which released its report on 'alternative finance and policy options for effective and sustainable delivery of housing in South Africa' yesterday.

It also believes the current approach to housing delivery won't be sustainable.

The FFC's main responsibility is to make recommendations on the equitable division of revenue between the three spheres of government and provide advice to organs of state on financial matters.

The commission's head, Bongani Khumalo, said the housing sector faced many challenges.

They included the ever-increasing housing backlog and a decreasing number of low-cost houses being delivered by the government.

Some of the reported 3 000 service delivery protests in the country since 2009 have been blamed on unfulfilled promises of RDP houses.

Khumalo said the backlogs increased from 1.5 million housing units in 1996 to 1.8 units in 2001 and then 2.1 million in February this year. 'If we were to look at the demands or backlogs that we currently have and we have to eliminate those by 2020, the total amount required for that period is about R800bn,' said Khumalo.

He said this would translate to just over R120bn a year.

The government currently allocates around R30bn to provide housing. 'So the sustainability is really an issue unless a miracle happens and suddenly we've got so many resources among ourselves as a country.'

Khumalo said the housing sector was also affected by the 'unique phenomenon' of an increasing gap market. The gap market is made up of households earning too much to qualify for subsidised housing, just above R3 500 a month, and too low to qualify for mortgage bonds, for those earning about R15 000.

'There is a growing number of people who do not qualify for subsidy houses and mortgage bonds at the same time.'

He said that, overall, the commission concluded that different households in different housing circumstances required specific interventions and a different approach.

The Star


Denny Crane

Denny Crane
It's not me ... yet. Denny Crane from the TV series Boston Legal. Click on picture if you're not sure who he is!