Comparing the use of housing as a financial and economic asset in rdp and bng housing projects: a case study of Dumisani Makhaye village, Umhlathuze municipality.

Abstract

The provision of low-income housing in post-apartheid South Africa has been one of the tools of reversing the effects of discriminatory apartheid planning and policies. The immense demand for low-income housing by those who were denied such by the apartheid government, coupled with the financial constraints of meeting said demand, shaped how housing would be provided post-apartheid. The provision of core/starter low-income housing units that would be improved by beneficiary households through the incremental process to make them ‘adequate’, depending on beneficiary household’s needs and circumstances, was the method of housing delivery adopted by the post-apartheid government. The incremental process of achieving adequate housing therefore had intrinsic expectations that low-income housing beneficiaries would use their houses as assets to access finance or start home-based businesses in order to facilitate the process. As an asset, housing could also be used as a tool to address the poverty and low income of its recipients. Starter houses provided in the Housing White Paper (HWP) policy era were termed RDP houses. Failure of the HWP as the first post-apartheid housing policy to explicitly emphasize and facilitate the use of RDP starter houses as assets by beneficiaries in order to achieve adequate housing contributed greatly to their constrained ability to perform as financial and economic assets. The second post-apartheid housing policy introduced in 2004, which was the Breaking New Ground (BNG) whose low-income housing units were termed BNG houses, is explicit and emphasizes facilitation of the performance of low-income housing as a financial and economic asset in its era, while retrospectively enabling the same performance of RDP housing that failed to perform as such in the HWP era. This study was undertaken to determine whether low-income housing has performed more as a financial and economic asset in the BNG era than it did in the HWP era, as envisaged by the BNG housing policy. Data gathered through interviews, a household survey and observations was thematically analysed to present comparative findings, in which it was determined that some of BNG housing attributes like its size and design have enabled it to perform ‘better’ as an asset than RDP housing. However, despite the demonstrable ‘better’ performance of BNG housing, it has not performed as such to the fullest extent possible, as envisaged by BNGhousing policy. This is despite the state’s attempts to encourage such use by beneficiary households through operating small businesses and/or its use as security for a loan, among other things. Reasons for the sluggish performance of RDP and BNG housing as a financial and economic asset range from lack of knowledge by beneficiary households about how to use low-income housing to access finance or start small home-based businesses, to the packaging of low-income housing projects that did not inspire the performance of housing as an asset. The research concludes that the packaging of housing projects needed to conceptualize how housing units would be attractive to lenders and /or how they can be used to generate household income, among other things. It is also recommended that there should be partnership between sectors, the financial and business sectors for example, and the municipalities to ensure low-income housing’s performance as an asset can be improved.