Construction of affordable housing in South Africa has received the much needed impetus, after the Department of Human Settlements (DHS) and the Banking Association of South Africa (Basa) said that they are currently working on a memorandum of understanding to help deal with housing backlog in the country.
This will also help advance DHS’S aim of delivering millions of affordable housing units in the coming four years.
The project is a public-private partnership through a cooperation that will see both parties extend housing finance on a sustainable basis to low-income borrowers who failed to meet government’s subsidy threshold but could not afford private sector housing.
In an initial agreement on low-cost housing made in 2005, there was a target of up to US $3.30bn set aside for the development of such properties. However, this fizzled shortly after.
According to the Acting Director General of DHS, Mbulelo Tshangana, the housing backlog stands at 2.1million with the government funding of US $12.69bn through the Medium term strategic framework. This was not adequate thus the private sector was needed to support the same.
Tshangana also noted that the DHS and Basa had signed a deal that would see the banking sector commit to increase approved end-user loans for affordable housing, support urban development, set clear housing programme, outline delivery targets-outcomes and mitigate the housing constraints related to affordability.
Both parties would appoint working teams that would give effect to the MoU, with the intention of “operationalising” the partnership and accelerating the financing of affordable housing.
The quest to provide affordable housing in South Africa has continued to remain a thorn in the flesh in the country despite several intervention aimed at taming the situation.