Simon Sizwe Mayson Secure Tenure the Solution to SA Housing Crisis Wits Mc DP Application Essay

October 2010

The South African Housing Crisis: Secure Tenure the Viable Solution
Introduction South Africa suffers from a history of disproportionate and damaging practices in land use and housing policy that dates back to the first European settlers of 1652 (Crane, 2006). Post-1994 our government has invested a large proportion of its yearly budget in housing in an attempt to rectify the inequalities that have resulted. In last years budget Trevor Manual announced over R45 billion as being earmarked for the Breaking New Ground housing plan, to be spent over the next three years (The Citizen, 11 February 2009). However, service delivery protests continue some claim that theyre worsening, that frustration over lack of government action in the informal settlements is growing (Alexander, 2010). Perhaps as a result of this, the Department of Housing was last year renamed the Department of Human Settlements, indicating the realisation that a change in thinking is necessary (Sabinet, 10 May 2009). This essay examines the possibilities the Department has before it, and argues that facilitating secure property rights is more important than providing houses for the urban poor. While both policy options hold value in the South African housing crisis, emphasis needs to be placed on the basic provision of site and service with security of tenure. Governments Response to Present Needs Napier (2007: 14) claims that the current operation of the [urban land] market reproduces and reinforces marginality, exclusion and poverty. He highlights a number of reasons for this, including property developers manipulating the system to their own end, a lack of information amongst the poor, and little incentive for the private sector to operate in these areas. Government intervention is necessary in order to reduce the legacy of spatial inequalities in South Africa. The governments current response to the housing crisis is in the form of four intervention categories forming the Breaking New Ground policy released in 2004: 1) financial, 2) incremental housing programmes, 3) social and rental housing programmes, and 4) rural housing programmes (The National Department of Human Settlements, 2009). Both the provision of top structure housing and secure tenure forms a part of the second intervention category. The Integrated Residential Programme (IRU) entails land, services and township proclamation as phase 1 and housing construction of individual ownership options as phase 2. This programme remains relatively unchanged from the RDP-style programme in place from the dawn of the new democracy (Smit & Brown-Luthango, 2009). However, the concept of secure tenure is found in two relatively new programmes: the Peoples Housing Process (PHP) and Informal Settlement Upgrading (ISU). The PHP assists households to access the subsidies and support required to build their own homes, while the ISU involves in situ upgrading of informal settlements as well as where communities are to be relocated. It entails community consultation and participation, basic services provision and security of tenure. However, policy has not translated successfully into action, and South Africa has yet to see the PHP and ISU programmes rolled out to the same degree as IRU (Smit & Brown-Luthango, 2009). This essay examines the two concepts of secure property rights and housing provision in light of the South African housing policy described above. The Provision of Complete Top-Structure Housing

Simon Sizwe Mayson Secure Tenure the Solution to SA Housing Crisis Wits Mc DP Application Essay

October 2010

Catherine Cross paper, Attacking urban poverty with housing: Towards more effective land markets (2006) investigates our governments attempts to deal with the housing crisis. She highlights that housing alone is not enough to ensure escape from poverty, and faults particularly the ability of IRU-type programmes to achieve this goal (p2). She identifies that the welfare needs of unemployed and marginalised residents living in shacks are seen by cities as threatening their ability to invest in the business infrastructure required to maintain economic growth and remain internationally competitive. The national welfare budget is already unsustainable for government (Hirsch, 2005, as cited in Cross, 2006). Furthermore, almost 45 percent of all South African households (5.7 of 12.7 million) are classed as poor enough to receive subsidised municipal services, adding to the burden on the Department of Human Settlement in its goal of poverty alleviation. Despite the massive rollout of complete houses, the backlog continues to grow. In Cape Town, the delivery of houses is a maximum of about 8000 units per annum, while the growth of households due to net in-migration and natural growth is estimated at 25 000, meaning that the backlog grows at an unthinkable 17 000 per annum (Adlard, 2009). The scale is simply too large for the government to attend to in its current mode. Even for those families that provided with houses, the process has been rife with problems. Because of the lack of available land, and the high prices associated with land near city centres, government-sponsored housing developments are often located on the periphery, far from employment and education opportunities (Napier, 2007). Homogenised low-income neighbourhoods form, lacking social services and opportunities within their boundaries (Robins, 2002). With South Africa burdened by an official unemployment rate of greater than 25 percent (Mail and Guardian, 2010), many households cannot keep up with the services payments required from formal housing, as well as the added investment to maintain the new status required of a formal house-dweller (Ross, 2009). Whats more, because people are mostly relocated on an individual basis, to distant corners of a city, the sense of community is lost, along with the social networks and capital it brings (ibid). They are thus often driven to sell their house illegally on the informal market, and relocate back to a shack (Cross, 2006). The formalisation sought after by government and the international community is shown to naturally disintegrate in the new housing developments. Robins study of Joe Slovo Park identifies the re-informalisation (2002: 517) that occurs, with backyard shacks, and informal additions to the brick houses to accommodate more people proliferating. Lastly, the long waiting period of up to 15 years for a free government-provided house possibly depresses investment in ones current dwelling, as there is little purpose in investing in a structure that you hope to soon vacate (Nomaledi Tyala, personal communication, August 2010). The Case for Secure Tenure and Self-Help Housing Secure tenure, not only as the most viable housing delivery option, but as the solution to general market failure in poor countries, is convincingly advocated by Hernando De Soto (1994). De Soto argues from his experience in Peru that investment in property increases nine fold when there are secure property rights in place (1994: 3). People naturally want to improve their standard of living, and when they are able to do this while being knowledgeable that it is not merely a temporary basis, they will improve on their dwellings independently (Ross, 2009). Not only do people better their own dwelling, but they invest more in the environment around them when ownership is uncertain, there is a tendency to maximise the short run at the expense of preserving its long term value (De Soto, 2000).

Simon Sizwe Mayson Secure Tenure the Solution to SA Housing Crisis Wits Mc DP Application Essay

October 2010

De Soto also claims that providing title deeds to property for the poor allows people to use the property as collateral in order to access loans from banks and formal lending institutions (1994). Field and Torero (2004) on the other hand, found in studies performed in De Toros Peru and elsewhere no significant increase in the ability of the poor to access loans. They also found that the process did not heighten entrepreneurial activity, as generally people were unwilling to foreclose their only viable asset for a high-risk start-up business. Even so, both credit-seeking and entrepreneurial activity increased in the building sector, with people learning and sharing house-building skills, and generating income accordingly (Field & Torero, 2004; David Mayson, personal communication, August 2010). In South Africa, in the few places where secure tenure combined with site and service and self-help housing has been promoted, the reports have been positive. Victoria Mxenge housing project in Khayelitsha was one of the first founded by the South African Homeless Peoples Federation (Lifeonline, 2009). After being inspired by slum-dwellers who visited in 1991, a group of 30 women started the project, making regular savings of small sums of money which are pooled in a savings scheme. They combine these with government grants and build the houses themselves, using local labour. The Federation of Homeless People have now built nearly 10 000 houses throughout South Africa (ibid.). Moreover, as Sankie Mthembi-Makanyele emphasises If youve involved people initially from the planning process to the completion of their home, they get attached to that structure because of what we call Sweat Equity. Theyve made sure theyve participated in acquiring their new home. Gilbert (2007) also identifies the possibilities of income generation through formal leases, once title deeds have been awarded. John Turner remains one of the most well-known proponents of self-help housing. He believes that the standards of housing plans such as the IRU are based on what people ought to have, rather than what they need (as cited in Battersby, 2009). Turner identifies three needs which housing should satisfy: identity, opportunity and security, rather than it being merely a commodity (Turner, 1976). People should be allowed to build with what they feel are the most suitable and cheapest materials. Often this allows access to land that is closer to the city and employment. Evidence for De Soto and Turners arguments can be found in the South African context. Land invasions and delivery protests have been rife for years, with Robins (2002: 517) quoting the Financial Mail on the Bredell invasions in Johannesburg that were occurring at the time The striking thing about Bredell is that the people are not demanding a government-provided house or services, but a piece of land on which they can build a home for themselves, in which they can be secure and where services can be provided in due course. The Western Cape grassroots organisation Anti-Eviction Campaign followed a similar sentiment in its campaigning for the rights to land for the people of Macassar and Joe Slovo (Hartley, 2009). The government has two programmes in policy form that are aligned with these arguments; however, they need to be put into practice in a more concrete way. Providing site and service schemes is considerably cheaper than providing the full top-structure, and thus the programme can be more extensive and attend to the growing housing backlog. Additionally, the resources freed up by unburdening the housing budget should be channelled into enduring that certain conditions are in place.

Simon Sizwe Mayson Secure Tenure the Solution to SA Housing Crisis Wits Mc DP Application Essay

October 2010

Conditions for a Pro Secure Tenure Policy De Sotos argument (1994) for registration of property under the formal title deed system should be re-examined, and a possible alternative investigated - one not as lengthy or financially intensive. Gilbert (2002) proposes that legal titling is not necessary for the functioning of the housing market, and perhaps encourages abuse and illegality. Possibly a middle road should be found, where people can register their property under a more informal and quicker, free process, such as what is found within chiefdoms in some rural areas of South Africa. This would prevent arguments arising over the extent of ones property. De Soto (2000) speaks of the transition in Germany and the United States of America from the informal ownership rights system to the formal, centralised system in place today. He describes it as an organic process where the practices already in place were translated into law. Such should be the consultative process followed when formalising the property market in informal settlements. Site and service provision should include the certification of services and facilities in close proximity or within the development, such as clinics, shops and areas where entrepreneurial activity can take place (see Gilbert, 2002). Even so, the suburban property model should be avoided, as has been shown to fail in Robins (2002). Lastly, South Africas insistence on the complete removal of informal settlements and the instantaneous replacement with formal brick housing is greatly influenced by current thinking in institutions such as the United Nations (Cross, 2006). Policy and practice internationally has fallen more into line with discourse such as that found surrounding the UNs 11th Millennium Development Goal of improving the lives of one hundred million slum dwellers by 2020 (ibid.). Gilbert (2007) remarks on the myths about poor people associated with the term slum. The South African government should recognise the impossibility of the complete eradication of informal settlements, and work instead toward supporting people endeavours to create their own housing solutions. Conclusion South Africas housing situation is truly a crisis as it currently stands, but it does not have to remain this way. If poor people are encouraged to provide for themselves with the support of government, rather than to rely on the government to provide all, people will become an asset rather than stay a liability. A focus on secure tenure, combined with appropriate services and employment opportunities, will ensure the more efficient use of government resources, and sustainable poverty alleviation possibilities. Policy in the form of the Peoples Housing Process and the Informal Settlement Upgrading programmes are in place it is now just a matter for government to act.

Simon Sizwe Mayson Secure Tenure the Solution to SA Housing Crisis Wits Mc DP Application Essay

October 2010

References Adlard, G. (2009, August). The housing problem and how to frame it. Lecture notes accessed online 22 August 2009 at www.vula.uct.ac.za Battersby, J. (2009, 11 August) Housing 4: The case against self-help. Lecture notes accessed online 21 August 2009 at www.vula.uct.ac.za Brooks, C. (2009, 22 July). SA hit by service delivery protests. Mail and Guardian. Accessed online 22 August 2009 at http://www.mg.co.za/article/2009-07-22-sa-hitservicedelivery-protests Citizen, The. (2009, 11 February). Big budget boost for housing. Accessed online 22 August 2009 at http://www.citizen.co.za/index/article.aspx?pDesc=88791,1,22 Cross, C. (2006). Attacking urban poverty with housing: towards more effective land markets. Urban LandMark Position Paper 2 prepared for the Urban Land Seminar, November 2006 De Soto, H. (1994). The missing ingredient: What poor countries will need to make their markets work. Housing Finance International: June, 3-5. Accessed online 21 August 2009 at http://www.housingfinance.org/pdfstorage/hfi/9406_Dev.pdf De Soto, H. (2000). The mystery of capital: Why capitalism triumphs in the West and fails everywhere else. London: Black Swan Gilbert, A. (2002). On the mystery of capital and the myths of Hernando de Soto: What difference does legal title make? International Development Planning Review: 24 (1), 1-19 Gilbert, A. (2007). The return of the slum: Does language matter? International Journal of Urban and Regional Research: 31(4), 697-713 Hartley, A. (2009, 5 January). Anti Eviction Campaign urges poor to boycott elections. Cape Times. Accessed online 22 August 2009 at http://www.abahlali.org/node/4692 National Department of Human Settlements. (2009). Breaking new ground in housing delivery. Accessed online 22 August 2009 at www.housing.gov.za Robins, S. (2002). Planning suburban bliss in Joe Slovo Park, Cape Town. Africa 72 (4), 511-548 Ross, F. 2009. Raw Life, New Hope: Decency, Home and Housing in a PostApartheid Community. Cape Town: UCT Press SabinetLaw. (2009, 10 May). New cabinet structured to meet five year delivery plan. Accessed online 23 August 2009 at http://www.sabinetlaw.co.za/presidency/articles/new-cabinet-structured-meet-5year-delivery-plan Smit, W. and Brown-Luthango, M. (2009, 14 August). Housing policy in South Africa: focus on informal settlement upgrading and the Peoples Housing Process. African Centre for Cities. Lecture notes accessed online 22 August 2009 at www.vula.uct.ac.za Turner, J. (1976). Housing by people: towards autonomy in building environments. London: Marion Boyars.

Simon Sizwe Mayson Secure Tenure the Solution to SA Housing Crisis Wits Mc DP Application Essay

October 2010