Demand for social housing increases
02 March 2021
As Capetonians sift truth from lies in what has become a media mud-slinging fest between the City of Cape Town and a former Mayco member, one thing is sure, the economic fallout linked to the pandemic has seen an increased demand for social housing in the Western Cape.
Earlier this month, Good Party secretary-general Brett Herron accused the provincial government of lying about inner-city housing developments in Cape Town. The City hit back, saying that social housing projects are well on track and not cancelled as “falsely” claimed. Neither parties, however, can deny the urgent need for social housing in the province.
Social housing rental units cater for households earning between R1 501 and R15 000 per month, in higher density “block” developments. Social housing institutions (SHI) accredited by the Social Housing Regulatory Authority (SHRA) in terms of the Social Housing Act undertake the property management of these developments.
To access this service, South Africans who are 18 or older need to apply to these SHI’s directly. These institutions include Communicare, SOHCO, Povicom, Own Haven, Madulammoho, Instratin and Urban Status Rentals (Devmark).
Formed in 1929, Communicare carries the badge of being the oldest SHI in the country. Today, however, social housing makes up but a small part of its property portfolio.
Anthea Houston, chief executive officer of Communicare, says of the 3 500 apartments and houses that Communicare rents out, 10% (as regulated by the SHRA) are social housing units and 80% are gap housing or other other low social rentals that do not fall under the regulation of the SHRA.
Gap housing is targeted at people who earn too much to qualify for a government-subsidised house but earn too little to qualify for a bond from a bank to buy a house. The remaining 10% is rented at rates slightly higher than the gap market.
The social housing properties in Communicare’s portfolio include the Drommedaris pilot project (219 units), Bothasig Gardens phase two (120 units) and Bothasig Gardens phase three (314 units are currently under construction).
Houston says the company has seen a steady increase in applications for social housing since March 2019. “This is largely as a result of households downscaling to cope with the economic recession or those looking for affordable ‘work from home’ apartments,” she says.
According to Houston, there is a drastic shortage of social and gap housing in the province. Of the applications received, Communicare can accommodate 85%.
The company does not usually keep a waiting list but has started screening applicants who want to move into the new Bothasig Gardens social housing apartments scheduled to be completed later this year.
Nathan Adriaanse, director of communications from the Western Cape Department of Human Settlements, confirms the sector has seen an increased demand for social housing.
“It is also evident that a number of existing tenants were affected by the Covid-19 pandemic in terms of job loss or salary cuts, which resulted in a decreased rental collection rate. However, the sector as a whole identified options in which to assist such tenants, which included non-evictions and debt-relief measurements,” he says.
Supply and demand
According to the department, there are currently seven social housing projects active in the province, comprising 2 688 units in total. These projects are Steenvilla (700 units), Drommedaris (219 units), Bothasig (120 units), Scottsdene Rental Estate (500 units), Belhar Gardens Rental Estate (629 units), The Anchorage (416 units) and Regent Villas (104 units).
“At present, the social housing project pipeline consists of 35 projects which seek to cater to 5 233 households. These projects are planned for delivery in the City of Cape Town, Cape Winelands and Garden Route districts. Feasibility assessments are under way to determine the viability of pipeline projects,” says Adriaanse.
Malusi Booi, the City’s Mayco member for human settlements, says several well-located projects in central Cape Town are set for major milestones this year, with a projected total of around 620 social housing units.
“Pine Road is due to break ground, Dillon Lane is at development application stage, and Salt River Market is now just months away from handover to a social housing developer. The Newmarket Street site (444 units projected yield) is also in the pipeline for social housing,” says Booi.
First in line
As the forecast for economic recovery post-Covid-19 remains cloudy, it is safe to assume there will be quite a long queue of applicants. Adriaanse says the application process generally commences within the last year of the construction of a project.
“Since this is a rental housing project, vacancies can become available over time and to fill these units, the SHI’s will revert to the application list. However, applications can still be submitted on an ongoing basis.”
In line with the fundamental goal of social housing – to ensure integration from a spatial, social and economic point of view – it seems that applicants who already live in the respective areas where social housing projects are under way will be first in line.
“Social housing projects firstly seek to assist qualifying applicants within the area, but has an allocation for applicants outside the area for persons to be close to the above-mentioned opportunities,” Adriaanse says.
However, as social housing projects are “rental projects and rely on rental income for sustainability”, he adds that the key selection criteria is affordability.