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2. Current Challenges
However, despite these improvements, inequalities have continued to grow and
the government is struggling to reduce them. Economic growth is not spreading as the
government would like, and the gap is widening between economically integrated
populations and the poorest. Unemployment is growing: it was officially 23.08% in 1996,
and 24.13% in 2004. 26 A large percentage of the South African population lives in
extreme poverty: in 2005, 52% of the total population was beneath the Minimum
Living Level. 27
2.1.4. Housing Challenges
As we saw earlier, a proactive housing policy has been in place since 1994, and
has provided a roof to one and a half million households in a decade. This programme
rapidly came to be seen as an incomplete response for several reasons. Offering
ownership of property to relatively poor households has inconveniences as the
households are not necessarily able to regularly pay their house-related expenses
(electricity, water, repairs, upkeep) and are sometimes obliged to sell the property for
very small sums. Indeed, the RDP houses’ architectural uniformity and minimum
comfort did not encourage a true secondary market to emerge, and this lack of
encouragement was further strengthened by the government’s discourse discouraging
resale. Next, as has already been emphasized, rental solutions were not chosen and
do not allow for an alternative offer to meet the diversity of needs. In addition, the subsidy
offered by the government starting in 1994 only applies to households earning less than
3,500 rand per month. Thus, there was no housing solution for households above this
threshold; these households could neither receive the subsidy nor take out loans from
private banks. This phenomenon is called gap housing and found a partial solution
through the growing social involvement of banks and a proportional extension of
government assistance.
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The limits of this policy and the growth in the number of households (population
growth and smaller household size) perpetuated, even worsened, the housing crisis.
The number of households without formal housing grew from 1.45 million in 1996 to
26. Source: Quantec.
27. Percentage calculated from the State of the Cities Report 2006, South African Cities Network.
© AFD 2009 Integrating Poor Populations in South African Cities