An assessment of the role of public-private partnership models in the delivery of affordable housing in South Africa : a case study of SOHCO Property Investments, Durban.

Abstract

Social housing is an instrument that is used to facilitate the production of effectively managed institutional housing. Social housing may take various forms and is managed by social housing institutions through public and private funding. A commitment towards social housing in South Africa was seen during the years between 1995 and 2000, with the establishment of the National Housing Finance Corporation which began initiatives in the country for social housing. However, as time went by, providing affordable housing became more of an issue than a solution for the South African government. The public sector realised that combating the issue of the affordable housing shortage would not happen with their limited resources and capacity. This brought about engagements with the private sector to assist in this regard. This is where the notion of public-private partnerships is formed in the delivery of affordable housing. Theories such as Neoliberalism and the Enabling Approach support and illustrate the importance and the role of public-private partnerships in order for government to produce public services or infrastructure to a country. This dissertation assessed the role of public-private partnerships and its extent in the delivery of social housing in South Africa. The assessment was enhanced by evaluating and drawing comparisons between two main public-private partnership models used in South Africa, which are the Build Operate Own Transfer model and the Build Operate Transfer model. This study also evaluated which model is more commonly used in order to deliver social housing in Durban and the challenges that are experienced through this public-private partnership arrangement by the government and the private sector. A social housing institute and one of its projects in Durban was used as a case study for this dissertation in order to evaluate how social housing institutions and the government come together in a public-private partnership arrangement to deliver social housing. Information was collected through interviews conducted with professionals in both the public and private sectors. The interviews were able to demonstrate interesting contrasts and similarities in public-private partnerships, with the build operate transfer model being of preference when delivering social housing. The main findings were that social housing institutions are seen as a vital factor; however they require better support and assistance from government in order to make social housing more sustainable and to create more viable projects. This assistance can be done through more incentives, better funding, land availability, and restructuring of zones for social housing development. Government is faced with the challenge of the lack of social housing institutions in order to assist with social housing development. The study proposes recommendations on improving public-private institutions for delivering social housing by both the private and public sectors. These recommendations include the introduction of better incentives to attract more private sector involvement, more government funding, better understanding of procedure by social housing institutions and more engagement between both sectors, particularly by social housing institutions and private entities.