It is not too late to introduce a market-based arrangement that serves the poor
02 December 2019 - 18:30
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Jonny Steinberg’s observation about the inestimable damage done to the poor by the delivery of housing over the last 25 years is a tragic truth. Its consequences will be with us for another generation. But to blame suburbanites is counterfactual.
The first ANC housing minister, Joe Slovo, was a communist, even if pragmatic. When the construction and finance sectors jointly approached the ministry with an ambitious programme to help implement his white paper, he turned them away publicly.
Instead the state was to finance, build and hand over houses in a centralist fashion, as it still does. No gearing of state spending, no community contribution other than as passive recipients, and a private sector reduced to being contractors.
A more fruitful approach would have been to do what the government did for whites in the 1960s and 70s. Young first-time home buyers could access softened home loans with interest rates subsidised by the state, which allowed families to buy where it suited them. This created a ready market for developments such as Sunnyside in Pretoria and Hillbrow in Johannesburg.
As things stand, the poor are forced to go and live where the state’s building programme dictates they should. It is not too late to introduce a market-based arrangement. The government could create a bespoke housing finance dispensation whereby, say, a building society is permitted to procure cheap foreign loans, gets favourable tax terms and is explicitly mandated to serve the poor with housing.
This would solve the spatial transformation challenge in one generation without the endless debate on where people should be “distributed to”. It would stimulate the self-help building industry phenomenally, and while it may not result in new high-density urban centres, informal settlements can thereby become zones of real and formal investment.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
LETTER: Housing solution
It is not too late to introduce a market-based arrangement that serves the poor
Jonny Steinberg’s observation about the inestimable damage done to the poor by the delivery of housing over the last 25 years is a tragic truth. Its consequences will be with us for another generation. But to blame suburbanites is counterfactual.
The first ANC housing minister, Joe Slovo, was a communist, even if pragmatic. When the construction and finance sectors jointly approached the ministry with an ambitious programme to help implement his white paper, he turned them away publicly.
Instead the state was to finance, build and hand over houses in a centralist fashion, as it still does. No gearing of state spending, no community contribution other than as passive recipients, and a private sector reduced to being contractors.
A more fruitful approach would have been to do what the government did for whites in the 1960s and 70s. Young first-time home buyers could access softened home loans with interest rates subsidised by the state, which allowed families to buy where it suited them. This created a ready market for developments such as Sunnyside in Pretoria and Hillbrow in Johannesburg.
As things stand, the poor are forced to go and live where the state’s building programme dictates they should. It is not too late to introduce a market-based arrangement. The government could create a bespoke housing finance dispensation whereby, say, a building society is permitted to procure cheap foreign loans, gets favourable tax terms and is explicitly mandated to serve the poor with housing.
This would solve the spatial transformation challenge in one generation without the endless debate on where people should be “distributed to”. It would stimulate the self-help building industry phenomenally, and while it may not result in new high-density urban centres, informal settlements can thereby become zones of real and formal investment.
Jens Kuhn
Cape Town
LETTER: Not just in SA
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