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Housing in South Africa: A complex mix

by Darren
Housing in south africa

The demand for free and low-cost housing still outstrips the supply in South Africa, with the need for more integrated communities becoming top of mind.

Integrated communities seem to be a hot topic where housing development is concerned, not only used by politicians to gain public favour, but also in the circles of forward-thinking architects. WALLS & ROOFS takes a closer look at this movement.

With more than 1,2-million households and 4,4-million people living in shacks in about 2 700 informal settlements across 70 municipalities, according to a 2013 report by the Centre for Development and Enterprise (CDE), a policy research and advocacy organisation, the demand for free and low-cost housing in South Africa remains an enormous challenge.

This is despite the Department of Human Settlements’ website ticker indicating that since 1994, more than 3 800 760 housing opportunities and services sites have been delivered. One has to note though, that these housing opportunities don’t only include free housing, but also subsidy housing and stands connected with services such as water, electricity and sanitation, with or without tenure.

The majority of these housing projects are also located in rural areas and on the far peripheries of cities, built without considering where people in these communities will be working, shopping and sending their children to school, leading to occupants having to spend exorbitant amounts on transport.

Architect and urban designer, Fanuel Motsepe, who completed his Master in Human Settlements and has led significant city rejuvenation projects in the inner city areas of Johannesburg and Tshwane, believes that South Africa could have achieved a much grander human settlements programme than what has been done so far.

“Aside from the low quality of housing that has been developed, the failing services and the corruption between officials in government and the private sector in how deals are being brokered, South Africa lacks vision and the collective commitment that is evident in other countries,” Motsepe comments.

“If you compare the RDP squatter settlements that we have been building since 1994, to what is happening in Egypt and Angola, where people are being given proper homes in medium- to high-rise buildings within the cities, not on the perimeters, it is clear that we have accepted mediocrity as the norm,” he notes. “Bear in mind that housing dictates the country’s economy – only once you have a sense of the scale of housing, can you interpret the scale of economic drive for commercial, retail and other sectors,” he adds.

Ludwig Hansen, architect and urban designer, also with a masters’ degree in architecture in human settlements, says that unfortunately the current government has been so fixated with the provision of housing and basic services to the broader community since 1994 that they didn’t think about where it happened. “Without ill intent, they built houses further and further away from places of work and opportunities, and it just became too spread out to properly serve,” he says.

A push for integrated communities
This is why, according to Hansen, there is a push for integrated, mixed developments. In fact, there have been attempts to incentivise integrated developments since the early 2000s.

“At last, it is a logic which is coming into fruition,” he states. “It is a tendency that is not only driven by government or municipalities, but also by private developers recognising the need, so we are going to start seeing a greater mix of social stratification than before, especially in the inner city environments I imagine.”

Hansen explains that underutilised brownfield sites within cities could be targeted for possible housing developments, as well as the reuse of existing buildings, both through the identification of state-owned land and in the private sector through the conversion of buildings into housing.

“This is definitely happening. In Johannesburg there are proposals for new developments and also redevelopments which are geared towards integrated communities, and I can’t imagine that it would be any different for other metropolitan areas in South Africa,” he says.

According to Manie Annandale, head of Nedbank Corporate Property Finance’s Affordable Housing Development Unit, there are also major developments planned for Northern Farms, just north of Steyn City in Midrand around the Kaalfontein/Tembisa area, as well as in the south of Johannesburg in areas close to Thokoza, Protea Glen and Soweto.

However, he warns that one has to be careful and responsible when combining open market homes with free housing to make sure that it is what the market wants and to avoid strife within communities. One example of a successful mix is Soshanguve, where homes of various sizes on the same street range from around R300 000 to ones selling for R550 000 or R600 000. “This means a family who first bought the lower cost house, can upscale in the same community,” he explains.

Terminology check
With the term low-cost housing being used to refer to a wide range of housing types, it is important to understand the jargon, says Annandale.
•    Affordable housing is open-market units that can either be sold or rented to the open market. It includes homes priced below R620 000 and rental units at R5 500 per month, or below.
•    Subsidy housing refers to free housing, previously known as RDP homes, provided by the state to home owners earning less than R3 500 per month.
•    Social housing is a rental option for people who earn below R3 500 per month.

The social housing tenant income band is R1 500-7 500pm upon entry to the unit. It has remained unchanged since 2008 when the restructuring capital grant (RCG) was introduced. Social Housing Institutions (SHIs) are allowed to adjust rentals annually for inflation, so SHIs with older developments are currently serving more affluent tenant groups, for example R3 000 to R9 000. But when units are vacated, the rental and tenant income needs to go back to the original legislative target, which is R750 per month rental for tenants earning between R1 500 and 3 500 per month.

Affordable housing demand outstrips supply
According to Annandale, the demand for affordable open-market housing is about 600 000 units a year, while the industry probably delivers only about 23 000 a year at the moment. “Judging from the activity of our developers, if they can find s suitably serviced land, the demand in this bracket is almost insatiable, especially close to metros,” he says.

While the selling market remains robust, one of the biggest influences steering the affordable housing industry at the moment is the fact that the rental market is picking up tremendously, notes Annandale.

“This is because up to eight out of ten people who apply for home loans don’t qualify. These eight people don’t disappear, but still need accommodation, so they are forced to consider renting, which is fuelling the increased demand for units below R5 500 per month, just above the social housing level,” he explains.

According to Annandale, this is further confirmed by the intention of the likes of Arrowhead Properties to buy rental units from developers to create a residential fund in South Africa.

One of the biggest obstacles though for the development of affordable housing, highlighted by Allandale, is the high input cost for suitable land, especially in areas such as Cape Town, where the natural barriers of mountains and sea limit the available land. “If the land released by the government could be accelerated, it would go a long way to solve the huge gap between supply and what is required,” he states.

Hansen agrees, saying that the government is often slow in releasing land for the development of affordable housing and other amenities such as schools. “It would probably be best if government departments can partner with private developers and release land with conditions for development, so that it could be driven differently,” he proposes.

Megacities planned
In April the Gauteng Department of Human Settlements announced five new megacities to be built over the next ten years, transforming human settlements and spatial planning in Gauteng.

“We are breaking away from the old mode of development of small projects and develop large-scale projects of no less than 15 000 units,” comments Gauteng Premier David Makhura.

According to a Brand South Africa article, the megaprojects aim to deliver more than 800 000 houses within 30 residential developments spread across the five development corridors in Gauteng, namely:
•    The Central Development Corridor, anchored on the city of Johannesburg.
•    The Eastern Development Corridor, built around the economy of the Ekurhuleni Metro.
•    The Northern Development Corridor, anchored on Tshwane.
•    The Western Corridor, encompassing the economy of the West Rand district.
•    The Southern Corridor, encompassing the economy of the Sedibeng district.

The overall residential market
The FNB Property Barometer’s 2015-2016 residential property forecast pinpoints the highlight for 2015 to be a more noticeable surge in newly built residential building completions, although it is still expected to be about -39,5% below the peak in 2007. Consequently, this is predicted to ease residential supply constraints in 2016, leading to slower annual house price growth from next year onwards.

At the top end of the market
Upmarket residential development also covers a broad range of housing types, from luxury apartments to high-end homes in the suburbs or country-style housing on large plots of land.

Trend-wise in this sector, Thomas Gouws, whose architecture and interior consultancy’s expertise lies in the design of exclusive contemporary residences, says that with ever-rising energy costs and unstable and unsustainable power supplies, energy efficiency and living of the grid is top of mind in this sector.

“We’ve observed a greater underlying awareness of being connected to and living in harmony with the natural environment, which has been expressed in various forms and green trends over the past couple of years,” he points out. “Therefore a building’s place in its immediate context and its response to the climatic conditions are an important generator in upmarket residential designs.”

However, creating good and contextually responsive architecture that is both energy efficient and at the same time cost-effective, is a challenge, according to Gouws. While going green means endless future benefits and long-term cost savings for home owners, it usually inflates the initial building cost substantially.

He also notes that although the energy-efficiency regulations of SANS 10400-XA have been in effect for a couple of years now, some clients are still unaware of its existence and the implications for complying, so therefore it is mostly driven by architects. In addition, the Construction Regulations 2014 promulgated under the Occupational Health and Safety Act have placed a lot of responsibility on both clients and architects.

Trends become outdated very quickly, therefore we try to steer clear of them when selecting materials and finishes. We rather choose materials and finishes according to the considerations set out below.

In light of the regulations and trends, when specifying products for upmarket homes, the main considerations include:
–    Suitability: It must be appropriate for its purpose and fit the overall design concept.
–    Quality: It must be durable.
–    Design longevity: It has to be timeless.
–    Green: It must contribute to the energy efficiency of the building and where possible come from sustainable resources.
–    Cost: It must give the client value for his money.

It is clear that mono-functional housing developments are not the answer to housing challenges in South Africa. Whether looking at the affordable or upmarket sector, people need more than just housing and more than just one option in an area. Integrated communities, although they come with their own challenges, should allow people to live close to where they work, and to shop and have access to public amenities without having to travel excessive distances.

Full thanks and acknowledgement are given to Ludwig Hansen Architects + Urban Designers, Motsepe Architects, Nedbank, Thomas Gouws Architects, FNB and Stats SA for the information given to write this article.

 

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