The overarching definition used in describing affordable housing, is housing units that are affordable to a section of society whose income is below the neighbourhood’s median or average household income.
However affordable housing comprises various types of housing and for South Africa’s cities to truly become inclusive, integrated and transformed, affordable housing in urban areas need to not only cater for lower-income earners, but must also incorporate the middle-income market.
The four affordable housing types found in government policy, local government developments and some of the national government frameworks around human settlements include gap, transitional, social and inclusionary housing.
Gap housing is defined as subsidies and products provided by government and financial institutions to enable households with a monthly income of between R3 501 and R22 000 to purchase property through the Finance Linked Individual Subsidy Programme (FLISP).
Transitional housing is temporary housing afforded to individuals and households which helps them prepare to transition to more permanent options. It is recognised that, because of the shortage of alternatives for low-income households, some are likely to remain on a semi-permanent basis.
Social housing is state-subsidised rental housing for households with a monthly income of less than R15 000 that is developed and operated by an accredited social housing company or institution otherwise known as SHIs.
Inclusionary housing is developed by the private sector for a market that does not have access to the development or the area within which the development takes place.
Building a sustainable solution
National and local government have admitted that they lack the resources to tackle the country’s housing issues alone, which possibly makes inclusionary housing the most viable option. One way that developers are able to contribute, while still ensuring the profitability of their projects, is through securing additional development rights.
Inclusionary zoning is a basic intervention used by top cities around the world to ensure that private developers build a fair amount of truly affordable housing in exchange for additional development rights.
Up until recently, social housing was seen as the only way to retain housing units as affordable in perpetuity. However, inclusionary housing might provide a better alternative as these homes are purchased and not merely rented, therefore promoting ownership.
For South Africa’s cities to truly become inclusive, integrated and transformed, affordable housing in urban areas needs to not only cater for lower-income earners, but must also incorporate the middle-income market (earning between R15 000 to R45 000), who are also unable to afford to live in well-located urban areas. This will ensure that more people from a mix of income brackets benefit from urban opportunities.
Rashiq Fataar, Future Cape Town director, on SA Affordable Housing