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Mogane joined, there were only four
or five social housing institutions – of
which three had tenants. By 2001, the
NHFC had rationalised the business
and brought the HIDF under its wing,
bringing with it 2 900 units.
In 2004, the Minister of Housing,
Sankie Mthembi-Mahanyele, sepa-
rated the Social Housing Foundation
and made it independent of the
NHFC. Social Housing Foundation
continued to provide capacity build-
ing programmes, whilst the NHFC
continued to provide top-up funding.
Each year two or threemore social
housing institutions came on board
and, in 2008, the Social Housing
Foundation evolved into the Social
Housing Regulatory Authority (SHRA).
The new regulatory authority ac-
credited social housing institutions
and projects and mobilised grant
funding. With this came the sourcing
of technical expertise to support the
institutions in developing housing
stock. Today, SHRA provides 70% of
the grant funding required and the
NHFC provides 30% of the funds
required in the form of a project
loan.
Mogane explains that 70% of
grant funding is non-repayable,
but comes with certain conditions
and criteria to serve this sector –
and to make social housing rental
space affordable. Rental levels are
determined by SHRA.
In 2009, the income criteria in-
creased to between R1 500 and
R7 000. This, however, does not
mean that someone earning over
R7 500 cannot access social housing,
Mogane says there is a formula that
provides for cross subsidisation. For
example, someone who earns R3 500
per month will pay rent of R750 or
R1 000 per month, whilst another
tenant earning R10 000 per month
will be charged R1 800 or more per
month. Cross subsidisation makes it
more affordable for everyone.
One of the key requirements of
any social housing institution is to be
sustainable from the rental income
it generates, to repay loans. It has to
provide, clean, decent, well located
accommodation. In addition, extra
resources should be used to provide
amenities such as recreational facili-
ties and after school facilities. “That’s
what makes social housing,” says
Mogane.
He cites examples of social hous-
ing providers in Holland. “It is almost
like living in a middle income house
– the social housing complex includes
a crèche, after care facilities, and
some even include frail care facilities
for the elderly. We are not there yet
compared to European standards,
but are getting there. We now have
51 social housing institutions and 23
of them own andmanage their units.
The number of social housing units is
well over 24 000. South Africa is still
in its infancy compared to overseas
where some social housing institu-
tions are 100 or 150 years old.”
Another challenge for social hous-
ing institutions is size of the units.
Mogane explains that the social
housing provider has to be innova-
tive in the way that space is used,
in order to maximise the number
of units and make the organisation
sustainable. “The challenge is to dif-
ferentiate between the units without
creating tension between neighbours
as one tenant may pay R750 and the
neighbour R1 800.”
Soc i a l hous i ng i s not on l y
about families. He mentions that
the Madulammoho Housing As-
sociation provides accommoda-
tion for abused mothers and dis-
advantaged people. The individual
units share communal bathrooms,
recreational areas and kitchen facili-
ties. Mogane says that in 1998-2000
the cost was between R50 000 and
R60 000 to build a one or two bed-
room unit – R18 400 was provided
from the social housing subsidy
and the social housing institution
still required R41 600. At that time
the NHFC financed 80% of the
deal and the social housing grant
subsidy was 20%.
Today, a two bedroom social
housing unit costs R370 000, grant
funding including subsidies is
R235 000, the NHFC top up loan is
R145 000, and the average monthly
rental is R1 200.
He explains that the bulk of the
funding comes from SHRA.
Social housing does not yet meet
the demand but, says Mogane,
“Those people who are able to rent
froma social housing provider are far
better off, than they would be paying
market related rentals.”
There has been considerable
interest from European multilateral
institutions who are keen to fund
social housing. This is a positive
sign and shows that social housing
is on the right trajectory.” Going
forward, NHFC will no longer be the
sole funder. Commercial banks, local
authorities andmunicipalities will be
providing funding for social housing
Continued
▶▶▶
‘Government has
increased the social
housing budget and it
forms part of human
settlements, integrated
developments and
Catalytic projects.’
‘The challenge is to
differentiate between the
units without creating tension
between neighbours as one
tenant may pay R750 and the
neighbour R1 800.’