Provision of Affordable Social Housing to address the right to shelter, in the context of BRICS A case study and model of 3 South African Metropolitan cities Jaya Josie, Nozibele Gcora, Krish Chetty BRICS Seminar Series – 4 July 2017
South Africa - Informal Slum Settlement in Cape Town • Households from this Joe Slovo informal settlement near the City of Cape Town were resettled in Delft further away from the City and work.
Aim 1. Review and assess efforts to provide sustainable shelter to meet the increased demand in urban slums in Metros 2. Review public housing provision for disadvantaged and vulnerable communities 3. Review the provision of sustainable housing in South Africa for those caught between inaccessibility to mortgages because they don't earn enough, and inaccessibility to subsidized housing because they earn too much. 4. Discuss the housing challenges in BRICS 5. Provide modeling options identifying the opportunities to invest in Affordable Housing initiatives.
Human Settlement Project Perspective on Development • Chapter 8 – Transforming Human • Access to Drinking Water Settlements • Improved Sanitation • Chapter 5 – Environmental • Living in Slums Sustainability and Resilience • Chapter 6 - Inclusive rural economy • Chapter 9 – Improving Education, Training and Innovation • Chapter 10 – Health Care for All National MDGs Developmen t Plan Bill of SDGs Rights • S 26: Right to Adequate • Make cities and human Housing and shelter settlements inclusive, safe, • S 27: Right to Health resilient and sustainable • Availability and Management Care, food, water and Social Security of Water and Sanitation • S 29: Right to Education • Access to Energy
South Africa’s Constitutional Guidelines for Financing Housing & Related Basic Services The Bill of rights Constitutionally mandated basic services (CMBS) Access to basic services is a fundamental right to which everyone is entitled The right to housing (S 26) must be subject to progressive realization, as governments must operate within available resource Have the right to shelter, not a house
The current state of housing provision 20 Years Later • Segment demand for housing finance includes: • Households that are served and able to access mortgage finance • Households supported by the subsidy market (RDP Subsidies) • By comparison households falling in the income segment of R3,200 to R15000 per month have note been served – limited government or private financing available
Mind the Gap Market Households per Monthly Income • In the Census (2011) the income band that came 0% closest to the gap market were households earning 15% Below R3 200 between R3200 to R12800 pm. Housing Gap (R3 • 22% of all households in the gap market. 200 - R12 800) 22% • Above R12800 25% of all households are rented not owned 63% • 13% nationally live in an informal dwelling. Unspecificied Housing Backlog % Household Per Type of Dwelling • The housing backlog has remained constant at around Formal Brick/Concrete 1% 13% 2.1million for a number of years Structure 8% Traditional Dwelling Housing Delivery Informal Dwelling 78% • On average, the housing department provides 200,000 Caravan/ Tent or housing units each year. Little Impact. Other • For social housing, the Housing Development Agency % Household per Tenure Status ( HDA ) has provided 10,251 public sector housing units for rental over 5 years from 2007/08 to 2011/12 3% Rented Owned but not yet 25% • The Social Housing Regulatory Authority (SHRA) paid off 41% provided 7400 housing units in 2012/13 and 2013/14 Occupied rent-free 12% Owned and fully 19% • paid off Not addressing the needs of the Gap Market
Falling in the edges of home ownership and housing provision (Rust 2014) • Public & private provision supply of affordable housing to the gap market is inadequate • households earning between R3500 to R10 000 pm • support only 28.8% • No new housing construction, limited rental stock, limited resale value • The FLISP grant for subsidizing the private supply of new homes has failed • Households earning less than R3500 pm – support only 49.6% • Virtually no resale value • At current prices there is no market-based affordable housing available in South Africa • Current public housing policy focuses on financing of ownership of housing assets above the provision of housing and shelter
CASE STUDY
From backyard Private rental to Subsidized Rental From here in Langa … …to here in Rondebosch
Langa Transport Options • Train • Taxi’s • Bus Schools 10KM Community Health Centre 25KM Population = 52 401 Closest Employment Households = 17400 Opportunities 40% Completed School • Epping Industrial 40% Unemployed • CBD 42% Live in Informal Settlements 33% No Piped Water 28% No Flushing Toilets
Rondebosch Population = 19554 Households = 6990 92% Completed School 5% Unemployed Schools 1% Live in Informal Housing 1% No Piped Water 1% No Flushing Toilets Closest Employment Opportunities • Mall Clinics • Transport Options Shops • • Stadium Train • CBD • Bus • Various • Cars
From outside to Inside Toilets In Langa … …to Rondebosch
Two views of Table Mountain To Social rental in From Langa.. Rondebosch
Dilapidated Brazil’s Favelas: apartments in Russia HOUSING SITUATION AMONGST OUR BRICS PARTNERS Social housing in China INDIA’S HOUSELESS
Brazil’s Housing Shortage Housing Characteristics • 74% of Brazil’s households are Owner Occupied, 17% Renter Occupied, 7% Occupied Rent Free Backlog • Varied estimates of Brazil’s Housing Shortage, due to inconsistencies in Favela data collection • In 2009 - Joao Pinheiro Foundation • estimated a deficit of 7.2million units if the favela’s are excluded. • Estimated a deficit of 30 million units if favela’s are included • In 2009 – Caixa Econonimca Federal Study • Estimated a deficit of 9 million units • In 2011, Sao Paulo State Construction Industry Union using IGBE data • Estimated a deficit of 5.46million units • It is estimated 90% of the Housing Deficit (Excluding Favelas) lie in the low income space • IGBE Study indicates that 50% of Households in Favela’s lie in Middle Class, 4.5% live in Upper Class • 85% of the Deficit are in Urban Areas • 42% of the Deficit live in congested households, 35% experience excessive expenditure + rent, 18% live in precarious housing
Brazil’s Housing Policy • 2009 -Minha Casa, Minha Vida 2009 (My Home, My Life) • Stimulate Production and acquisition of new housing units for low income population • Mobilizes the private sector to contribute • Allocates subsidy finance • Guided by data on the housing deficit when building new housing units • Aims to promote economic growth in low-income households – creating jobs in the construction sector • Supports wide range of incomes • Prioritises low income households – receive a substantial increase in the subsidy amount • Also offers housing alternatives to Middle Income Households • Program includes Social Oriented Housing options • Offers a special credit line for organisations involved in social housing (i.e. Housing cooperatives & community based organisations) • Are lessons to be learnt for SA in Brazil
Minha Casa, Minha Vida – The Vision
Russian Housing Shortage • From 2000 – 2012 • Private ownership increased from 65% to 87% of all dwellings • Housing provision and backlog is measured in square meterage per person • In 2006 • 93 million square meters (3% of total housing) were in dilapidated houses • 11.2million sq m below safety standards • Challenge of maintenance • Residential Mortgage market now worth USD1.8 billion+ (1% of GDP)
Russian Housing Policy • Soviet Era • The State owned up to 90% of the Housing Stock in Urban Areas • Rent and housing costs were nominal and heavily subsidised • Housing was allocated according to “sanitary norms” that regulated the living space per person • No concept of mortgages • Post Soviet Era • State owned properties were transferred to the residents of the property • Privatisation lead to development of large condominiums • Introduced mortgage financing, mortgage agencies, securitisation • Launched the ‘Affordable Housing’ Project devolved to the municipalities • 2006 Housing Code - Government no longer managed maintenance and repairs of Social Housing Projects • Faced with burden of 40-50 years worth of repairs • Question of who is responsible for maintenance • Side Effects • 50% of homes require maintenance – population living in aging homes • Only 10 – 15 % of Russians can afford the mortgages • Experiencing low level of debt securitisation • New households are struggling to find accommodation
Russian Goal – Well maintained, adequate housing
Indian Housing Shortage • 69% of Urban Housing is owned, 94% of Rural Housing is Owned in 2011 • Indian Standards of Acceptable Housing differ to rest of BRICS • 91% of Urban Households live in an Acceptable building • Urban Housing shortage (2001) – calculated at 10.5 mill households • 1.9mill Houseless People in 2001 • 1.1 mill in Urban areas • 0.8 mill in Rural areas
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