RDP Assets Study

exhibition

If asked what they thought South Africa’s housing policy was all about, most people would refer to the housing subsidy programme.  Previously known as the RDP subsidy (referring to the Reconstruction and Development Programme of the first democratic administration in 1994) and now asserted as the BNG subsidy (given the policy shifts which occurred in the 2004 adoption of the new policy for sustainable human settlements, popularly referred to as Breaking New Ground) this instrument is the most notorious of all measures implemented by the Department of Human Settlements since the democratic election in 1994. Since the provision of the first subsidy in 1994 until today, the South African government has invested over R60bn of public funds into the provision of an estimated 2,8m subsidised housing units for low-income beneficiaries.  Of course, the housing subsidy programme was but one of seven policy thrusts in the original housing white paper of 1994, and again only one of multiple policy interventions set out in the Breaking New Ground policy of 2004.  It is without a doubt, however, the most visible.

Certainly, the delivery

Read More »

If asked what they thought South Africa’s housing policy was all about, most people would refer to the housing subsidy programme.  Previously known as the RDP subsidy (referring to the Reconstruction and Development Programme of the first democratic administration in 1994) and now asserted as the BNG subsidy (given the policy shifts which occurred in the 2004 adoption of the new policy for sustainable human settlements, popularly referred to as Breaking New Ground) this instrument is the most notorious of all measures implemented by the Department of Human Settlements since the democratic election in 1994. Since the provision of the first subsidy in 1994 until today, the South African government has invested over R60bn of public funds into the provision of an estimated 2,8m subsidised housing units for low-income beneficiaries.  Of course, the housing subsidy programme was but one of seven policy thrusts in the original housing white paper of 1994, and again only one of multiple policy interventions set out in the Breaking New Ground policy of 2004.  It is without a doubt, however, the most visible.

Certainly, the delivery successes of the national housing subsidy scheme have been dramatically impressive.  Over 2 million units delivered or under construction and as illustrated below, just over 1,6 million beneficiary households with legal title over these units.

It is highly likely that the significant increase in the number of South African households living in formal dwellings between 1996 and 2007 – from 64.4% to over 70% – is primarily as a result of this national subsidy programme.

In 2004, the (then) Department of Housing issued its new policy, popularly known as Breaking New Ground.  Among other interventions, BNG undertook to:

  • unlock the asset value of government subsidized houses
  • ensure the functioning of the entire residential property market
  • create a link between government subsidy markets and the private market so that subsidy beneficiaries could use their houses as a step-up onto the property ladder

 

Given the massive state investment, and substantial spread of impact that the government’s housing subsidy programme has had, it is important to evaluate its impact and test whether it achieved original objectives and evolving expectations.  Certainly, if expectations are not being met, government must consider policy adjustments.  And if expectations are being met, these successes should inform ongoing policy developments and state investment decisions.  A critical question, especially important to the FinMark Trust, is the role of private sector housing finance and savings in the performance of the state-subsidised housing asset.

The study will necessarily involve both quantitative and qualitative analysis.  On the quantitative side, a thorough review of the performance of government-subsidised stock, as witnessed in the deeds registry, will be required.  The consulting team will work with the Affordable Land + Housing Data Centre (al+hdc) in accesing deeds data and undertaking this analysis.  On the qualitative side, household surveys and focus groups with various sub-groups identified in the deeds registry analysis will be undertaken.

This study follows on from the Township Residential Property Markets study commissioned by the FinMark Trust and partners in 2003 and 2004, where the performance of property markets in former black townships in SA (including some government subsidized areas) was analysed.  It also follows on from the study into Housing Entrepreneurs, commissioned by the FinMark Trust and partners in 2005 and 2006, where the phenomenon of households using their homes as a basis for entrepreneurial activity was explored.  This study should also build on the theoretical framework of the housing asset triangle, developed by the FinMark Trust, in its assessment of how government subsidized houses have performed for their beneficiaries.

FinMark Trust is commissioning this study with support from the National Department of Human Settlements, the Western Cape Department of Human Settlements, the South African Cities Network, Urban LandMark, and the FB Heron Foundation.

FEATURED DOCUMENTS

View all related documents »