Our homes, our castles

The late former interior minister Connie Mulder must be spinning like a top. In 1970 he was able to predict a flow of black people from cities to “homelands” within four years. Resultingly, they would “only be able to occupy houses bequeathed to them by their fathers, in urban areas, by special permission of the minister”. For apartheid’s social engineers, that meant no need for new urban black houses, leading eventually to our post-1994 catch-up.

South Africans have done extraordinarily well in this. We now put up 12,8 formal houses for every shack being erected. From September 1996 to end-2011, this meant 1 000 houses provided by taxpayers every single day. At this rate, there will be neither homeless South Africans nor shack settlements in just another 15 years.

Not only is our housing and physical landscape changing for the better, but real social and economic mobility comes with ownership of fixed assets. Urban Africans are enjoying wealth accumulation unprecedented in our history, despite recession overseas and tightened credit at home.

Houses built by the private sector fell by 60% between 2003 and last year, says the 2012 SA Survey, mainly due to banks declining mortgage lending. You had a three-in-four chance of getting a bond in 2007 – now it’s one-in-two. Enter the taxpayer.

Mainly through the housing programme launched in 1996, including the outright provision of structures, or through subsidies for the poorest, loan guarantees to financial institutions to lend to those too rich to get an RDP house but too poor for a bond, and subsidies and technical assistance to private homebuilders both rural and urban, the country’s housing stock close on doubled from 5,8 million in 1996 to 11 million a year ago. The number of formal households for Africans jumped 140%, while the proportion of shack dwelling fell by a quarter and that of traditional structures by almost half.

Upward mobility follows. Thus in 2010’s second quarter, the sale of “affordable” houses only rose 2,6% compared with its 2009 counterpart, but sales of small houses (the next level up at an average price of R844 000) rose fully 29%. A study by economist Mike Schüssler in that year found African ownership of the primary residential market at 42%, compared to white ownership of 44%.

When looking at residential property of every type, he also found that while the value of African-owned houses was far lower than that of anyone else, 32% of Africans had a second property compared to one-in-ten whites. Total home ownership in SA was at 65%, as against 66% in the US and 42% in Germany.

Meanwhile, half of state-subsidised housing has already seen title deed transfers to new owners. As any Englishman whose home is his castle will tell, it isn’t just good for the soul to own your own piece of the planet, but it has knock-on positive effect on your other economic opportunities too.

Linked to the successful provision of basic services, enabling people to own formal houses brings them secure collateral for loans to use for business, education, and other things, and measurable rises in living standards come with this. Housing provision for the poor isn’t just nice to do, it’s a sound long-term by taxpayers for all sorts of economic reasons.

(Published in The Citizen, February 2013)

– By Paul Pereira