Resource information
In South Africa, provision of affordable, well-situated housing close to existing services and work places is hampered by the high cost and scarcity of appropriate land. Consequently, most new low-income housing projects have been developed on the urban periphery. This tends to entrench the spatial differentiation of residential areas by race and class characteristics of the apartheid era and increased the cost of providing services to low-income housing projects inhabitants.
Presently, no policy mechanism by which the state can proactively acquire high-value land for affordable housing projects is in place. One of the acknowledged problems with the current approach to the acquisition of land for housing is that it is reactive and demand-driven. Although well-located land does come onto the market, aligning the acquisition of this land with government approval for low-income housing projects has proven difficult. Also, the current housing subsidy is not sufficient to meet the difference between the cost of well-located land and the end-price that those in need of affordable housing are able to pay.
This paper examines the proposed Housing Development Agency Bill and asserts that in order to properly address this, better information on average land values, which will assist in calculating the average land loss figure, is needed. The cost-benefit analysis in respect of the creation of a HDA indicates that the success of this option in economic terms is highly dependent on the assumption that this option will lead to a reduction in transport costs.
The paper identifies a number of risks associated with the establishment of the HDA, including the risk of problematic arrangements between NDoH and DLA, unavailability of funds for land acquisition, direct compete between the HDA and private sector, perception that HADs are over-riding the constitutional mandate of provinces and municipalities and that the provision of high-value, well-located land at subsidised rates may be seen as unfair by housing beneficiaries whose land costs were not subsidised in this way.
The author recommends that there is a need for further consultation between the NDoH, provincial and municipal government on the implementation of the HDA option and improved coordination between the NDoH and other departments affected by the HDA proposal.
