Municipalities forever increasing utility rates directly impact the affordable housing target market. Picture Supplied
Image: Picture Supplied
Embedded in South Africa’s current and future property challenges is the issue of affordability.
Lesego Diale, the marketing and communications manager at the Social Housing Regulatory Authority (SHRA), said the problem is further made pronounced by the municipalities forever increasing utility rates which directly impact the social housing target market.
“The other main challenges for the sector include the need for sustainable funding mechanisms to support social housing projects, ensuring that land suitable for social housing is made available for development and streamlining approval processes to enable faster implementation of projects,” Diale said.
The SHRA is a public entity that provides state-subsidised rental housing targeted at low to medium-income groups earning between R1 850 to R22 000.
Siphamandla Mkhwanazi, a senior economist at FNB, recently told Independent Media Property that issues related to municipal service delivery and unstable local government administration have affected property values and investor confidence.
"The cost of rates and taxes that outpace inflation, while quality and pace of service delivery lags, are negatively affecting affordability and investor confidence, eroding the city’s allure. These factors suppress property values,” Mkhwanazi said.
Diale said increased collaboration with financiers and developers can expand investment in affordable rental housing. The new year presents both challenges and opportunities for South Africa’s human settlement developments.
"This year, we anticipate an increased focus on enhancing the regulatory framework to accelerate social housing project approvals, unlocking more funding partnerships, and fostering greater collaboration between government, the private sector, and non-profit organisations to scale up delivery,” Diale said.
She said government-led infrastructure investment programmes created an enabling environment for social housing expansion.
The SHRA said the successful delivery of social housing projects in key metropolitan areas, which increased access to affordable rental housing for low-to-middle-income earners, was one of their key achievements.
“An example is the 990-unit Grand Central Social Housing Project, which was launched on Tuesday, March 3, in the heart of Midrand close to various social amenities, including workplaces. This affordable rental accommodation creates a positive disruption in the sector.”
The entity said it has also enhanced its compliance and accreditation processes to ensure the sustainability of projects under regulation and the financial viability of Social Housing Institutions (SHIs).
It said it has also invested in training stakeholders, including municipalities and SHIs, to improve project management and financial sustainability.
Diale said that while progress has been made, the sector is not yet at an ideal growth rate due to constraints such as limited budget allocations to the SHRA relative to the demand for affordable housing.
“We are advocating for twice the allocations we are currently receiving to turn the country into a construction site and reconstruct our cities by building affordable rental housing.”
She said the slow land release processes delayed project rollouts. “We are working with the Housing Development Agency and the Department of Public Works and Infrastructure to access the unused inner-city buildings for repurposing them into social housing.”
According to Diale, challenges in infrastructure provisioning affect project feasibility in certain areas.
According to the entity, to improve the sector’s outlook, a more coordinated effort is required between government departments, municipalities, and private sector investors to ensure timely land release, efficient funding mechanisms, and supportive infrastructure development.
It said key interventions include expedited land and building release, increased budget allocations, and streamlined regulatory approvals as well as more financing options to make housing projects financially viable.
“These interventions will support the sector by ensuring a steady pipeline of projects, reducing administrative bottlenecks, and fostering long-term financial sustainability.”
Independent Media Property