Integrating Poor Populations in South African Cities - Agence ...
Integrating Poor Populations in South African Cities - Agence ...
Integrating Poor Populations in South African Cities - Agence ...
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7. Access to Hous<strong>in</strong>g: The Ma<strong>in</strong> End Goal of Urban Development Policies<br />
participation mechanism and ensure households’ ownership and attachment to their<br />
homes. A parallel can aga<strong>in</strong> be drawn with the Logements Évolutifs Sociaux (LES) <strong>in</strong><br />
overseas France: they are basic hous<strong>in</strong>g that must then be improved via selfconstruction.<br />
All plann<strong>in</strong>g authorities <strong>in</strong> Reunion Island agree that LES hous<strong>in</strong>g is a<br />
success because the families take ownership of them very well and the self-construction<br />
mechanisms function as planned or, for some households, better. However, the f<strong>in</strong>ancial<br />
conditions that need to be met to build LES hous<strong>in</strong>g are difficult to fulfil. 42 Reunion Island<br />
is nearly the only place where LES projects are still be<strong>in</strong>g built, and they are tend<strong>in</strong>g to<br />
disappear little by little.<br />
7.4.3. Credit-L<strong>in</strong>ked and Bonded Houses<br />
100<br />
The last type of hous<strong>in</strong>g proposed for ownership by the government is houses, built<br />
to slightly higher specifications than the RDP/BNG houses, that households can<br />
purchase with the help of home loans. Follow<strong>in</strong>g the massive policy of RDP house<br />
delivery, actors <strong>in</strong> the real estate sector realized that this distorted the market and that<br />
households earn<strong>in</strong>g slightly more than the 3,500 rand cut-off were unable to f<strong>in</strong>d<br />
affordable houses. The households that earn more than 3,500 rand and for which the<br />
market does not spontaneously offer solutions make up the public for what the <strong>South</strong><br />
<strong>African</strong> government calls gap hous<strong>in</strong>g. Spontaneously, <strong>in</strong> the F<strong>in</strong>ancial Sector<br />
Charter of 2003, and then <strong>in</strong> partnership with the authorities <strong>in</strong> a Memorandum of<br />
Understand<strong>in</strong>g signed <strong>in</strong> May 2005, private banks committed to <strong>in</strong>vest<strong>in</strong>g 42 billion<br />
rand 43 <strong>in</strong> mortgage f<strong>in</strong>anc<strong>in</strong>g for households that are unable to buy homes but do not<br />
receive government subsidies. There are two types of such houses <strong>in</strong> the construction<br />
projects <strong>in</strong>itiated by the government: credit-l<strong>in</strong>ked houses and bonded houses. For<br />
both, the bank<strong>in</strong>g sector <strong>in</strong>tervenes to provide loans and allow households to buy<br />
property. For credit-l<strong>in</strong>ked houses, the households targeted must earn between 3,500<br />
and 7,500 rand; the government provides <strong>in</strong> addition a direct subsidy to act as a<br />
guarantee, thus cover<strong>in</strong>g part of the risk due to the f<strong>in</strong>ancial weakness of the households<br />
concerned. Bonded houses (photo 6) are sold only with the help of the loans offered<br />
by the bank<strong>in</strong>g sector as part of its social commitments and without additional<br />
government assistance.<br />
42. Notably, the households must have sufficient steady <strong>in</strong>come (salary and/or government assistance).<br />
43. 42 billion rand = 3.2 billion euros.<br />
<strong>Integrat<strong>in</strong>g</strong> <strong>Poor</strong> <strong>Populations</strong> <strong>in</strong> <strong>South</strong> <strong>African</strong> <strong>Cities</strong> © AFD 2009