HUMAN SETTLEMENTS: Getting value via title deeds
Government plans to unlock an estimated R180bn of value for low-income home owners
In what appears to be a shift away from the previous focus on providing housing for the poorest of the poor, government is now looking to help bring more lower-income households into the formal property market.
In a bid to speed up broader participation in SA’s housing market, government is creating a title deeds restoration grant to help speed up the registration of state-subsidised houses in the deeds office.
The title deeds restoration grant will be funded through a reprioritisation from the human settlements development grant, which will be reduced by R7.2bn over the next three years.
Finance minister Malusi Gigaba said in his budget speech that though this will slow the delivery of new houses and serviced sites, the sector is still expected to build 316,813 houses and upgrade 417,391 sites in informal settlements by 2020/2021.
The Centre for Affordable Housing Finance estimates that about 1.8m — or 29% of the 6.2m formal residential properties on the SA deeds registry — were financed by the public housing programme. This reflects assets with an estimated value of R326bn.
However, Gigaba said that the full benefits of government’s housing programme have not been realised because a large number of houses built through state subsidies are not on the deeds registry.
As a result of this, owners cannot access the full value of their properties as no property can be sold or used as collateral to access bank funding without the possession of a title deed.
"About 1m state-subsidised properties still need to be registered for title deeds. Eradicating this backlog would increase the proportion of state-subsidised properties on the deeds registry to 39% of the formal housing market, thereby unlocking an estimated R180bn of value for low-income households,’’ Gigaba said.
Government has also confirmed its ongoing commitment to improve the living conditions of those in inadequate shelter.
Over the next three years, R123.3bn will be spent on subsidising public housing programmes. Gigaba said government’s housing programme will provide more than 417,000 households in informal settlements with access to basic services.
In line with government’s urban renewal and densification policy, 62,000 rental housing units are also expected to be built, while an additional 98,000 finance-linked individual subsidies for the affordable housing market will be provided. Bulk infrastructure for water and sanitation services will be supported through funding of 73 regional projects and 180 small, interim projects amounting to R34.2bn.
Government plans to increase spending on public transport infrastructure, water, sanitation, electricity and human settlements by an average 7.4%/year over the next three years.