Tagged: Communal

Shared ownership: a way up the property ladder?

HOME ownership in South Africa is turning into a hot potato in the runup to the 2014 elections. This after demands by various political parties for state control of private property in the country. Indications are the ruling party’s Reconstruction and Development Plan which aimed to provide every citizen with a decent home, despite its initial successes, has failed largely due to lack of co-ownership incentives. Could shared ownership of property offer a way up the property ladder for ordinary South Africans?

First, let’s take a closer look at the problem. Owning a sub-standard, badly built home has its disadvantages, worse still are the problems faced by those living in informal settlements, those still on waiting lists for housing solutions that seems unobtainable, even after twenty years of ANC rule.

Although a number of social housing schemes have arisen, each claiming to provide gap housing for the poor with banks offering loans to those lucky enough to have full-time employment, and the government’s housing subsidy aiming to bridge the finance gap, this subsidy programme is aimed mostly at key workers with good credit records. The traditional housing market, geared towards the black middle class may be booming with new projects rolling out, but these schemes like the Maboneng precinct in Johannesburg, do not solve the problem of low-cost and affordable housing for the nation’s poor.

In South Africa red tape and bureaucracy prevails with a centralised “Social Housing Regulatory Authority” which aims to regulate social housing schemes. The mandate of the authority is not to assist home ownership per se but rather to regulate and finance the development of rental accommodation. The State housing agency’s website for instance says “we stimulate rental housing through investment, we stabilise rental housing through regulation.” The result is anything but stable.

For starters there is no real focus on ending dependency upon the state and creating incentives beyond a subsidy for home ownership by private individuals, and the schemes touted by the agency essentially represent the needs of banks and developers.

The government-lead programmes, despite their high-minded altruism, are aimed at the interests of capital markets and not the needs of citizens, for instance “social housing is a rental or co-operative housing option which requires institutionalised management…”  The emphasis on “institutionalised management” and  return on investment (ROI) speaks to the bond market and not home-owners. This can be seen in the manner in which social housing projects are turning into get rich quick schemes for investors who already have money.

The National Association of Social Housing Oganisations for instance, which claims to be an independent association of 18 ‘well-established social housing institutions (SHIs) across South Africa” offers its members some form of ownership by mobilising “the collective buying and market power of our members to reduce costs of products and services and increase returns on investment,”  in the process, the needs of the end user, the person who wishes to occupy a property and who may then also want to rent to own, or transact ownership by others means, to part rent and part own, is lost.

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