LEBOGANG MAILE: Gauteng housing funding boosts township real estate market

We are confronted daily with the realities of rapid urbanisation in Gauteng. Though we live in a province of opportunities, our burgeoning population puts a strain on service delivery, including the provision of sufficient and decent housing. 

While the Gauteng government continues to roll out housing developments, this alone is not enough to deal with our housing shortfall, nor the stubborn challenge of poor living conditions. 

This month we officially launch the Gauteng government’s latest housing product offering, Kasi4Real, through the Gauteng Partnership Fund (GPF). This is an innovative funding solution that aims to enhance the township economy by providing funding for the development of housing. It will help homeowners build decent and affordable rental housing on their properties as well as formalise backyard structures. 

Backyard rental dwellings have increased rapidly in Gauteng and the rest of the country, with the number of households living in these dwellings increasing by 55% over the past decade. While many of these informal dwellings are not fit to live in as they are made of makeshift materials or do not have kitchens or ablution facilities, they are a source of affordable rental housing. 

The main issue with the backyard rental market is that it has failed to eradicate shack dwellings and informality. The lack of compliance with building and emergency services safety requirements is also a serious problem. The result is that living standards are compromised, placing a burden on existing infrastructure as well as creating unnecessary service delivery backlogs.

The sector has operated outside the legislative framework, with no dispute resolution channels in place between tenants and landlords, who largely operate on verbal agreements. 

According to the Gauteng city-region Observatory quality of life survey 2011, township real estate housing living conditions are somewhat better than free-standing shacks, but this is offset by the smaller amount of internal space. Proper homes provide dignified living, privacy and self-respect, an asset for households to invest in for security, and a space for social interaction as well as leisure. 

Depending on its location and affordability, formal housing can offer access to valuable economic opportunities, social infrastructure and other beneficial public and private facilities. The form, density and spatial arrangement of housing also matters for the functional efficiency of cities and the mobility of households. 

Revitalisation

The Kasi4Real programme is a response to the focused priority of the Gauteng government to improve living standards within townships and prioritise township economy revitalisation. 

The programme will entail the GPF entering the market to directly fund potential township developers for rental township developments, with at least a 95% investment for each development in the townships. This means new and existing township entrepreneurs who own their properties and have space to develop additional rental housing units will have access to funding at favourable interest rates. 

All Gauteng residents who are in possession of a title deed within the townships qualify to apply for this funding. They must have adequate building space and be able to build a minimum of four units that are not smaller than 15m². These new age back rooms will have a bathroom with a shower and small kitchen, and depending on the available building space can either be single or double-storey developments. 

The Kasi4Real programme will be implemented in 20 priority townships in the province, identified by the department of human settlements. To mitigate any risks related to municipal approvals, the GPF will draw up a memorandum of understanding with municipalities in terms of which applications can be fast-tracked should the applicant be part of the programme.

This will help reduce the time it takes for the approval of land use applications such as rezoning, which allows for a higher density and the approval site development plans and building plans. The appointed contractor will be obligated to purchase building materials from the township in which the development is constructed, which will also contribute to empowering SMMEs. 

By formalising township real estate there will also be an improvement in municipal revenue collection through rates and taxes, and an increase in the participation of black people in the construction and real estate value chain. 

Tenants will not only will have a decent living space, but lease agreements will assist them with Rica (Regulation of Interception of Communications and Provision of Communication-Related Information Act) and Fica (Financial Intelligence Centre Act) documentation, and a rental payment history will benefit them in future when renting other apartments or approaching financial institutions for financing. 

The housing crisis cannot be addressed in isolation of the need for more jobs, greater skills and improved livelihoods, but we do know investment in housing improvement, infrastructure and all the associated inputs can serve as a catalyst for a broader process of economic revitalisation and job creation. 

• Maile is Gauteng MEC for human settlements & infrastructure development