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Chapter 10 - Land and HousingHousingWhat is the governments housing policy? In 1994 millions of people in South Africa stayed in informal houses, overcrowded backyard shacks or far from where they worked. The housing backlog and the slum living conditions it created was a central concern of the government. In September 2004, the government released a comprehensive housing plan for the following five years. This plan, called “Breaking New Ground”, had the following targets: 1) Removal or improvement of all slums in South Africa as rapidly as possible, but not later than 2014; 2) Fast-tracking of the provision of formal housing within human settlements for the poorest of the poor and those people able to afford rent and or mortgages; 3) The creation of rental stock of housing for a rapidly growing, mobile (migrant) and urban population within the inner city and other locations close to employment opportunities; 4) To speed up development by removing administrative blockages and to aim to reduce the time for permission to be granted for building to 50% of the current time; 5) To educate and train housing consumers (owners and rental users) on their rights and responsibilities. The “Breaking New Ground” Plan includes the development of low-cost housing, a stronger emphasis on medium-density housing, affordable rental accommodation, the strengthening of partnerships with private housing developers; social infrastructure and facilities. The Plan also aims to change existing spatial settlement patterns, driven by the need to build multicultural communities in a non-racial South Africa. The gradual replacement of informal settlements with adequate and secure housing in well-serviced communities is a critical aspect of the plan. Laws passed to ensure people have access to quality housesThe following are some of the important laws that have been passed to ensure people have access to quality housing: -Development Facilitation Act (1995) This Act makes it possible to speed up land development, especially the provision of serviced land for low-income housing. It can help poor people, in that it makes it easier for local authorities to provide land and services faster. -Housing Act (1997) This Act makes provision for all the different spheres of the state and various other bodies to assist those most in need to get housing. -The Rental Housing Act (1999) This Act deals with the relationship between landlords and tenants and it applies to all written or verbal lease agreements entered into on or after 1 August 2000. The Home Loan and Mortgage Disclosure Act (2000) - This law ensures that banks lend money to all communities and do not refuse to give bonds to some communities while giving to others; - The Housing Consumer Protection Measures Act (1998) – This Act protects new home owners from getting poor quality houses by making sure that all house builders are registered with the National Home builders Registration Council and all new houses are enrolled under the Defect Warranty Scheme. House builders must comply with certain building standards and houses must be at least 30 square meters in size; - Housing Amendment Act (2001) – This Act gives the Minister of Housing the power to decide procurement policy on housing development so that, for example, local building materials or local labour can be used in a construction project. It also limits the sale of state subsidized houses. The housing subsidyA subsidy is a grant of money which is used to assist homeless people who qualify to build a house. A subsidy does not have to be paid back. The subsidy money does not go directly to the homeowner. Instead it goes to the developer that is building the house. The developer can be a private company, the local authority or a community organisation. What do you need to have to qualify for a housing subsidy? In order to qualify for a housing subsidy, you need to have the following:
It is very important to warn people who want to apply for a housing subsidy of the following:
What is a household?To apply for a subsidy you have to be part of a household. The subsidy scheme recognises different households as couples who are married or who live together and single women or men with dependants (children/old/disabled). Single person households do not qualify for a government housing subsidy although they can still rent council houses. Applying for a housing subsidy – getting your name on the waiting listPeople often ask how they can put their names on the housing waiting list. Many of these people are new arrivals in the urban areas or young people who do not yet have a house and may be newly married. They may also be people who used to live with their parents and who now want to live on their own with their families. However due to the big housing backlog not everyone who wants to get a house can get one immediately. People who earn enough money to buy a house can go to the bank and take a loan and buy a house without the support of the government. But if you earn less than R 3 500 per month and you qualify in all the other ways listed above, then you can apply to get government assistance to get a house. Local government is responsible for the delivery of housing and most local governments have housing departments. You can put your name on the waiting list at the housing department of the local council offices. Many councils have set up help desks to assist families with housing problems Checking if your name is listed on the housing waiting list Some people complain that they have been on the housing waiting list for a long time but they have not yet received a house. They see new housing developments and want to know when they will receive an RDP house. It is possible to check if someone is on the housing waiting list by going to the following website: www.ndd.co.za. You will have to enter the ID number of the person to see if he or she is on the waiting list. Types of housing subsidies availableIndividual subsidy – buying a house as an individual household This subsidy is for low-income households wishing to buy residential property for the first time and may be used to purchase an existing house including the land on which the house stands. This subsidy can only be used once by a successful applicant. In 2006 households with an income of R1 500 per month or less are eligible for a subsidy of R31 929. Households with an income between R1 501 and R 3500 per month are eligible for a subsidy of R29 450 and must pay a contribution of R 2 479. How much is an individual subsidy worth? It depends on how much your gross (before deductions) monthly household income is. In 2007 the subsidies were worth the following:
The subsidy amounts are fixed and are increased on an annual basis (in April of each year). How much will I have to pay in? You will have to pay the difference between the Individual Housing Subsidy and the cost of the existing house. For example, if you buy a house for R39798 and receive a subsidy of R38984, you will have to pay in R814, plus the transfer, bond registration and conveyancing attorney's costs. However, if you buy a house for R36087 and receive a subsidy of R38984, you will be able to pay for at least part of the transfer, bond registration and attorney's costs out of the R2 897 that is left of the subsidy money. Remember that this money will not be paid to you, but directly to the relevant party. How do I apply for an individual housing subsidy? There are two kinds of Individual Housing Subsidies, based on whether you can pay your contribution to the house out of your savings, or if you need to borrow money to pay for it.
What documents must I supply when applying for a subsidy? You will need to supply:
If you are applying for a Non-Credit-Linked Individual Subsidy, you will need to supply a certified copy of the signed agreement of sale for the property. Be sure to make the sale conditional to your receiving a housing subsidy. How is the individual housing subsidy paid out? A housing subsidy is not a cash payout but is paid directly to the financial institution from which you are receiving a housing bond (in the case of Credit-Linked Individual Subsidies) or the seller (in the case of Non-Credit-Linked Individual Subsdies). Will I have to pay anything back? The housing subsidy is not a loan and you do not need to pay it back. Consolidation Subsidy This is for people who have previously received a subsidy, live on a serviced site and want to build a better house such as building a top structure. This money can only be used for building as services have already been provided on the site. In 2007 households with an income under R1 500 per month qualify for a subsidy of R38 984. Households with an income between R1 501 and R 3500 per month qualify for a subsidy of R36 505 and must pay a contribution of R2 479. Institutional Subsidy This is for non-profit organisations like churches, local authorities or housing associations (also called “social housing institutions”) that want to provide rented accommodation to people from lower income groups. It is called an institutional subsidy because it goes to the institution who can rent out the housing to different families. A family who lives in this type of rented accommodation does not jeopardise their chance to apply for their own subsidy at a later date. This is because the subsidy for rented housing is taken in the name of the organisation and not in the name of the individual. The homes developed through the institutional subsidy must remain in the ownership of the organisation for at least four years after they are built. In 2007, the subsidy for the institutional subsidy per household is R36 505 which is paid directly to the non-profit organisation. The organisation must add capital. People’s Housing Process establishment grants These are special subsidies that are available to communities, or organised groups of households to enhance their housing subsidy by building or organising the building of their own homes themselves. By using their own labour rather than paying someone else, these households can make their housing subsidy and personal contribution go further by building better quality and/or larger houses for less money. An add-on of up R570 per subsidy is available under this scheme. In addition, the People’s Housing Process can also include the following support:
Rural subsidy This subsidy is available to people who don’t have formal tenure rights to the land on which they live. (Such land is owned by the government and tenure granted in terms of traditional laws and customs). The rural subsidy is available only on a project basis and beneficiaries themselves may decide on how to use their subsidies. The subsidy may be used for building houses, providing services of a combination of both. In 2007 the value of this subsidy was R38 984. Project-linked subsidy This may be used towards purchasing a house, and the land on which it stands, in an approved Municipal housing area. This is usually within a municipal housing project. The subsidy is paid directly to the Municipality that is building the housing. Households with an income of R1 500 per month or less are eligible for a subsidy of R38 984, Households with an income between R1 501 and R 3 500 per month are eligible for a subsidy of R36 505 and must contribute R2 479. Discount benefit scheme This scheme promotes home ownership among tenants of publicly-owned rental housing (municipal and provincial). From April, 2006, purchasers can receive a discount on the selling price of the property. In many cases, this amount is greater than the purchase price. When this happens the property is transferred free of any further costs. Some Municipalities have already transferred much of their housing stock to tenants who have utilised the Discount Benefit Scheme. Relocation assistance This is for home owners who are locked into paying for home loans they cannot afford. The loan must have been from an accredited lender and the borrower must have defaulted on at least three payments. This subsidy will help them purchase a home they can afford. A person who qualifies for relocation assistance must enter into a relocation agreement, so as to relocate to more affordable housing Households with an income of R1 500 or less are eligible for a subsidy of R38 984. Households with an income between R1 501 and R 3000 per month qualify for a subsidy of R36 505 and must contribute R2 479. An updated table of housing subsidies can be found on the government housing website: www.housing.gov.za NOTE: People with are disabilities (or who are health-stricken) may receive the higher housing subsidy for Individual, Project-Linked or Relocation Assistance even if their household income is more than R1500 but less than R3500 (and do not have to make a personal contribution). They are also entitled to receive an amount higher than the usual subsidy amount to cover the cost of special structures to meet their needs such as a wheelchair ramp for the mobility impaired. The role of development workers in helping people to access housing subsidiesSome people have complained that the housing subsidy is too little and that the houses that are built are too small. This is an important area where development workers can help communities to build better quality houses. Some ways to do this include:
Organisations and development workers can also help with problems in housing projects. For example, there have been some instances where communities have reported corruption in housing projects such as:
Here are some things you can do to assist in solving these problems:
The role of local government and housingThe law requires all local authorities to have an Integrated Development Plan (IDP) showing how they plan to develop land and housing in their area. The plan must cater for all the development needs in the area, including housing. If there are homeless people living in the area, it is the local authority's job to find land where they can be settled. Providing public housingLocal authorities are not given money from central government to fund housing, but they can raise their own money to provide for land and housing. There is a duty on government to provide people with rental housing in terms of the Rental Housing Act. Often they own a lot of low-income houses which many people still rent from them. The local authority is the landlord and decides who can get a house. They will give preference to families of single people when a house becomes available. See Problem 5: Provision of land, housing and services for homeless people. See Drawing up an integrated development plan. According to the Municipal Systems Act (No 32 of 2000), every municipality has to draw up and pass a by-law on credit control and managing debts. This should include provisions for arrangements for people who are in arrears - particularly for people who are indigent (living in poverty). It should say what penalties there are for people who don’t keep up on any of their payments, including the disconnection of services or the eviction of tenants or owners. Facilitating housing developmentLocal authorities are often in an excellent position to facilitate new housing developments, or to act in partnership with developers. In rural towns, they are often the only agents with the necessary experience and resources. See Problem 9: Falling behind on payments of rent, rates and services to the local council.
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