Rental Housing Strategy 2010 – 2014 a Strategic Foundation for Rental Housing

Building Sustainable Communities

Rental Housing Strategy 2010 – 2014 A strategic foundation for rental housing

Vision To create an efficient, effective and responsive rental housing market that prioritises the needs of lower-income households by encouraging the development and management of well-located, affordable rental housing opportunities. Mission To promote, facilitate and monitor provision of and access to sustainable rental housing. Guiding principles This plan emphasises that sustainable communities must be characterised by a sense of justice, limits, place, history, craft and nature.

All rights reserved. No part of this report may be reproduced or represented in any form without the written consent of the author. Published by the Department of Human Settlements Provincial Government: Western Cape 27 Wale Street, Cape Town

QUERIES: Mr. Anwar Swartz Rental Housing Tel: 021-483 2584 Fax: 021-483 6617 E-mail: [email protected] Website: www.capegateway.gov.za

Acknowledgements

The Western Cape Department of Human Settlements acknowledges the contributions of the Social Housing Foundation and other consultants in the preparation of this strategy.

2 Contents

Foreword by the Western Cape Minister of Human Settlements 4

MESSAGE FROM THE HEAD OF DEPARTMENT 5

EXECUTIVE SUMMARY 6

1. UNDERSTANDING THE RENTAL HOUSING CHALLENGE 11

New thinking about rental housing 11

Policy and legislative framework 13

Factors influencing rental housing demand 16

Factors influencing rental housing supply 19

2. A Five-Year Growth Trajectory for Rental Housing 21

Projections across the province 21

Strengthening internal capacity, stakeholder relationships and research 21

Key constraints and opportunities 24

2. STRATEGIC GOALS 26

Priority delivery areas 27

acronyms M&E monitoring and evaluation CRU Community residential unit MOU memorandum of understanding CRG Capital restructuring grant NHFC National Housing Finance Corporation CTCHC Cape Town Community Housing Company PHDP Provincial Housing Development Plan GHS General Household Survey SHF Social Housing Foundation IDZ industrial development zone SHI Social housing institution

3 Foreword by the Western Cape Minister of Human Settlements

The development and implementation of this Rental Housing Strategy is a very important initiative. I have always maintained that giving away free houses is unsustainable in the long run. This truth has become all the more clear to me in the year I have been in office.

One thing we are doing to respond to this is to scale back the amount of money we spend on houses every year and increase the amount we spend on servicing sites. We have decided to do a little for many more people, rather than a lot for only a few.

The other thing we are doing is gearing up to place greater emphasis on rental housing, which – provided it is well managed – is a sustainable method of providing affordable housing.

But we must acknowledge that our public rental stock is not well managed. That is why an important focus of this strategy is to enhance the management of rental stock to improve rent collection and property maintenance.

Central to this is creating partnerships with the private sector to develop and manage rental stock. On a recent visit to the United Kingdom, the thing that struck me the most was the extent to which they drew in partners from across different sectors to tackle all sorts of social issues – from crime and substance abuse to unemployment and unhealthy lifestyles – through housing. In addition, the state does not provide housing in the UK: social housing associations do. The state funds only 40% of new developments, and the associations must raise the other 60% from their own income and financing.

We have to work towards this model by encouraging greater private-sector investment in affordable rental accommodation for the low-income market. To underscore how seriously we take this issue, our department has created an affordable housing directorate to build partnerships with the private sector to increase the supply of affordable housing – including rental units.

Bonginkosi Madikizela Minister of Human Settlements Western Cape

4 Message from the Head of Department

The Western Cape Department of Human Settlements faces vast economic, social and spatial challenges in the provision of decent and affordable accommodation. These factors also affect the pace and character of the rental housing programme, which must play an important role in responding to the diverse, complex and ever-increasing housing needs across the province.

The department has taken these imperatives and challenges into account in developing this strategic plan, which sets out the goals, strategic priorities, programmes and targets for rental housing over the next five years.

The plan is ambitious yet achievable. We recognise that our work reaches far beyond building and managing housing delivery. It is about working together with local governments, social housing institutions, the private sector and residents to foster healthy, active and inclusive communities, and making a lasting and sustainable contribution to the well-being of the population across the province.

This Rental Housing Strategy – the first for the Western Cape – is built on our assessment of demand, supply and internal capacity. The plan is intended to provide all those with an interest in rental housing – communities, nongovernmental organisations, government and the private sector – with a sense of where we are going with the rental programme, and how we are going to get there.

The strategy commits to boosting the supply of state-funded rental housing, while expanding partnerships with the private sector to increase supply, and creating viable property development and management capacity in the province, municipalities and social housing institutions.

This plan is an investment in the future. By implementing the strategy, the provincial government will contribute to addressing the housing needs of low-income communities in the Western Cape.

Mbulelo Tshangana Acting Head of Department

5 executive summary

Executive Summary

he Western Cape Department a comprehensive package of policy banks and private-sector developers – of Human Settlements aims measures, efficient and accountable as well as an institutional framework to create integrated and government, partnerships with to expand the provision and efficient sustainable communities communities and the private sector, management of rental housing. This Tthroughout the province that can and a great deal of hard work. strategy is in concord with national access social and economic policy, including the national Breaking opportunities. While the province recognises New Ground policy. the importance of long-term policy To make this vision a reality, the planning, this cannot come at the This strategy focuses on three tiers provincial government supports the expense of short- and medium-term of the rental market: social housing creation of productive, inclusive, housing projects. As this report was (rental housing for low- to medium- well-governed and sustainable being finalised in March of 2010, income households), community cities. Expanding the provision of tenants began moving into the first residential units or CRUs (these rental housing, and improving the management of rental stock, are core elements of this plan. We aim to expand the supply and improve the management of rental housing This Rental Housing Strategy, covering the period 2010-2014, presents an analysis of rental housing as it now project developed under the new include former hostels that have been stands in the province, and sets out a social housing policy in the Western converted into low-income family new approach. This approach aims Cape. The Steenberg Social Rental units and other public housing stock) to increase the supply and proper Housing Project is a joint initiative of and backyard dwellings, which form management of affordable rental the province, the City of Cape Town a large part of the rental market in accommodation, and to bring the and the private sector. The site, built townships and informal settlements. formal and informal sectors together at a cost of R40 million, consists of into one unified market. 450 units spread throughout several Demand considerations blocks, and will house families with While there are some statistical gaps, Like the rest of South Africa, the monthly incomes of between R2 500 the available data overwhelmingly Western Cape faces an enormous and R7 500 per month. suggests strong demand for housing challenge. The Department affordable rental housing. Key of Human Settlements’ Five-Year The Steenberg development, based findings of the demand survey in the Strategic Plan estimates the provincial as it is on successful partnership Western Cape are as follows: housing backlog at between between government and the private 400 000 and 500 000. About 14% sector, points the way forward. In the • The number of households grew by of households in the province are future, the rental market will form an 2.1% per year between 2001 and shack dwellings.1 important and growing component 2007, with Eden (2.7%) and the City of affordable housing provision in of Cape Town (2.5%) the fastest- There is no silver-bullet approach to the Western Cape. The provincial growing districts over this period. resolve this housing crisis. Bringing government intends to create an about integrated and sustainable enabling environment for this process, • About 38% of households had a human settlements can only result from in partnership with communities, monthly household income of R3 200

1The Social and Rental Market in the Western Cape. 2009. Eighty20 for the Social Housing Foundation.

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or less in 2007, with noticeable (GHS) from 2002 to 2007 show a and there is consequently great differences in income distribution noticeable shift towards ownership, demand for shack rentals. across districts. In Cape Town 35% reflecting a bias embedded in Moreover, in terms of monthly of households have a monthly income national housing policy. Households household income, those in the of R3 200 or less compared with with monthly earnings of between below-R7 500 income bracket 59% for the Central Karoo. One in R3 500 and R7 500 (the social are most likely to rent. In light of three households receives some form housing target market) constitute 28% these facts, the strategy prioritises of state grant. of the rental market. developing the rental market among households with monthly incomes • Roughly one in four households The greatest scope for growth of of between R1 500 and R7 500. (375 000 across the province), live low-income rental housing is found Initial efforts will focus on expanding in what appear to be inadequate in Cape Town, Eden and the CRUs, social housing and the use conditions. These include shacks, Winelands. These districts have the of institutional subsidies, as well backyard dwellings, overcrowded highest number of households earning as developing a policy to support formal dwellings and formal between R800 and R3 500 per expansion and formalisation of dwellings with no sanitation. Shack month, as well as great demand, with supply in the backyard rental market. prevalence is highest in Eden (18% of a high degree of inadequate housing households) and Cape Town (16%). conditions. Economic growth and stability, along with employment, are key factors in • One-quarter of households rent Affordability is a key consideration. households’ ability to pay rent over their primary dwellings. Data from Rentals paid for shacks are low a sustained period of time, and must the General Household Surveys (generally less that R200 per month), be considered in project decisions.

7 executive summary

In addition to Cape Town, Eden affordability in target market segments, province. However, given the economic and Winelands districts, which have and a positive balance of “push-pull” profile of many communities, where demonstrated strong economic growth factors influencing choice. demand is concentrated in the R800- in recent years, the strategy identifies R3 500 per month household income eight “leader towns” for rental housing As the rental housing strategy is category, supply initiatives must initially development: George, Knysna, rolled out over the next five years, concentrate on developing CRU housing Mossel Bay, Worcester, Hermanus, further consideration will be given to and the rollout of backyard programmes. Stellenbosch, Paarl and Wellington. expanding this programme into smaller A key factor in selecting these eight towns throughout the Western Cape. In Cape Town and the leader towns priority towns is the concentration of the West Coast, Cape Winelands, of housing demand. They are also Supply considerations Overberg and Eden districts, there characterised by sizeable populations It is critical to increase provision of low- are limited quantities of well-situated, that can justify the cost of investment, cost, well-located rental housing in the state-owned land suitable for formal state-funded rental housing. All of these towns have made provision for land to be earmarked for rental housing in their human settlement plans, and this land must be officially allocated and released for rental, following which the land needs to be “packaged” through environmental authorisation and town planning approvals. In most cases – with the notable exception of Cape Town – municipalities will require provincial support for these processes.

Institutional capacity, or the lack thereof, is a major constraint to expanding provision and management of rental housing stock in municipalities. Provincial support will be required as part of a drive to increase skills levels.

Indications are that there is scope to increase the role of private-sector developers and property managers in rental housing, provided that legislative and policy initiatives go some way towards addressing their needs. The strategy will promote private-sector participation in the lower end of the market.

The considerations noted above are discussed in greater detail in Section 1: Understanding the Rental Housing Challenge. Six annexures that provide the research underpinning this strategy are available online at

8 http://dashboard.pgwc.gov.za, private sector, the province plans to support • CRUs should be encouraged and covering international trends, demand, the development of at least 7 287 social expanded where there is institutional supply, national and provincial policy housing units and 9 623 CRUs, provided capacity for property management. and legislation, and institutional that a funding gap can be addressed. This can be achieved with support arrangements. from the provincial government. In considering these projections, several A five-year plan to grow points should be emphasised: • Specific land parcels for all forms rental housing • Social housing can be increased of state-funded rental should be At the heart of this plan is a five-year significantly in Cape Town, where identified, allocated and released, projection to expand rental housing in delivery and management capacity and packaged according to the Western Cape, as shown in the table exist. However, more dedicated a prioritised pipeline. This will below. These projections are based on funding is needed. Social housing can require support from the Housing local government assessments of suitable also be expanded to the Eden, Cape Development Agency. municipal land for rental housing, and have Winelands and West Coast districts, been published in the spatial development provided that restructuring zones are • The possibility of using the institutional frameworks of integrated development established, municipalities acquire subsidy as an instrument for providing plans. In partnership with municipalities, additional capacity and provincial affordable rental alternatives to social social housing institutions (SHIs)2 and the support is provided. housing and CRUs – such as rental

FIGURE 1: Summary of rental housing projections, 2010-2014

area 2010 2011 2012 2013 2014 5 year total District Municipality SH CRU SH CRU SH CRU SH CRU SH CRU SH CRU 280 Cape Town 270 320 664 Not 1 150 360 650 400 780 400 3 514 1 760 identified

Swartland 136 160 296 West Coast Saldanha 250 500 250 1 000

Drakenstein 255 100 100 247 355 347

Langeberg 120 180 300 Winelands Breede Valley 100 240 490 96 250 250 196 1 230

Stellenbosch 200 200 250 500 280 240 280 200 1 010 1 470

Knysna 152 180 130 200 220 200 280 200 782 780

Eden George 160 150 250 280 280 240 240 300 930 970

Mossel Bay 180 120 180 180 240 200 240 500 840

Overberg Overstrand 120 150 180 180 630

total 270 320 1 276 1 606 1 900 2 750 1 961 2 680 1 880 2 267 7 287 9 623

2Section 21 companies, for-profit firms or municipal entities that develop and manage social housing stock.

9 executive summary

with shared facilities for seasonal farm • Regulation of the CRU programme. 4. Create viable property management workers and other temporary renters – capacity, arrangements and systems should be investigated. Strategic goals The department will support the creation This strategy has four goals: of sufficient property management • It is crucial to strengthen stakeholder capacity to realise the targets in the relationships. As part of this process, 1. Build a suitably structured delivery programme. This will include the provincial government will establish organisation that is responsive to rental providing assistance to municipalities, two forums for engagement and housing needs promoting consumer education and cooperation – one for informal and An efficient, effective structure is enhancing regulation of landlord-tenant backyard landlords, and another for needed to implement the strategy. The relations. the formal private sector, including Western Cape Department of Human property developers, property Settlements will strengthen its rental Budgetary considerations managers, farm owners and funders. housing section, and work to realign this This strategic plan proposes a significant unit’s responsibilities with those of other increase in the delivery of rental housing Strengthening internal capacity directorates. in the Western Cape, and consequently Within the Department of Human requires a step up in state funding. The Settlements, the driving force for this 2. Increase the supply of targeted, rental strategy projects supplying 16 910 strategy is the provincial rental housing state-funded rental housing new and refurbished rental units over the subdirectorate. This unit, however, has The department will ensure that state- next five years, while the department’s limited capacity, and is reliant on both funded rental housing supply is increased Five-Year Strategic Plan provides for the internal and external partnerships to effectively to benefit low- to middle- delivery of 6 970 rental units over this deliver on its mandate. Over the period income households. The primary focus period – a difference of 9 940 units. ahead, the unit will work to solidify and will be the existing CRU and social The current three-year budget projection formalise partnerships with key external housing programmes, new use of the for rental housing is R676 million. To realise the goals presented in this strategy, a budget of R3.8 billion would It is crucial to strengthen stakeholder relationships be required over the five-year period.

The department will consider alternative stakeholders. In addition, the department institutional subsidy, and development mechanisms to bridge this gap. will strengthen the unit in line with its of the backyard dwellers’ programme. A large portion of these funds may growing responsibilities. Particular In addition, these initiatives will be become available through the National attention will be paid to: carried out in line with the broader Department of Human Settlements’ • Planning, budgeting and performance policy goals of overcoming our inherited proposed 30% increase in allocations management. spatial legacy, and promoting inclusivity for rental housing. • Programme management of CRU, and sustainability. social housing and institutional Towards integrated, sustainable subsidies. 3. Expand the supply of private-sector communities in the Western Cape • Investment programme management rental housing for the lower-income This strategy, which will be phased – including subsidy administration, market in over the next five years, will set in especially as it relates to project The department will work to increase its motion an expansion of rental housing applications, approvals and contract understanding of rental housing supply accommodation as part of the long-term management. (formal and informal) by the private effort to build sustainable, integrated • Development, facilitation and sector. Improved understanding will help communities that can be enjoyed by all maintenance of stakeholder to underpin partnerships to increase and residents of the Western Cape. relationships. manage the supply of acceptable rental • Building capacity, particularly at housing stock by the private sector. municipal level.

10 1| Understanding the Rental Housing Challenge

outh Africa faces a housing covering the period 2010/11 - 2014/15. largely the result of three legislative and challenge of massive A key part of this strategy is to expand policy developments: proportions. The Department of the provision of rental housing. About • Enactment of the Social Housing Human Settlements’ Five-Year one-quarter of all households in the Act (2008) and the new funding SStrategic Plan estimates the provincial province rent their primary dwellings. dispensation it provides. housing backlog at between 400 000 This proportion is low relative to many • The CRU policy and guidelines. and 500 000. countries (though higher than the national • Introduction of the National Rental average of 19%), which suggests that Housing Strategy in 2008. There is no panacea for the housing there is significant scope to expand rental challenge. Bringing about integrated and housing in the province. In the short term, these policy initiatives sustainable human settlements over the long aim to provide consumers with more term will be the result of a comprehensive New thinking about choice. Over the longer term, they aim to package of targeted policy measures, rental housing address the highly segregated nature of efficient and accountable government, Over the past half decade, there has our cities, bringing about more equitable, partnerships with communities and been a fundamental shift in thinking sustainable and integrated urban the private sector, and hard work. This about how South Africa approaches landscapes through the design of mixed- perspective is set out in the strategic plan rental housing delivery. This refocusing is use and mixed-income communities.

11 executiveunderstanding summary the challenge

A snapshot of the rental housing market in South Africa

The national supply of rental section of the market is highly buildings in inner-city or township housing ranges from backyard active. areas that have been taken over shacks to the private market. The by a municipality and funded by figure below captures the income • Transitional – Rooms for short-term housing funds. and accommodation “ladder” rental. along which this takes place. • Social housing – Rental or • Communal – Housing with shared cooperative housing for medium- The categories of rental housing facilities (e.g. kitchens, washing and to low-income households are defined broadly as follows: bathroom facilities) for low-income (earning between R1 500 and • Informal settlements – These earners. R7 500 per month). This option, settlements are generally illegal, which requires institutionalised management, is provided by SHIs or other delivery agents in FIGURE 2: THE RENTAL HOUSING LADDER approved projects in designated

Private market restructuring zones (nodes R7500 Inclusionary identified for social housing) with Housing the benefit of public funding/ R1500 – R7 500 Social incentives.3

R800 – R3500 CRU formal • Inclusionary housing – Projects in Communal which private-sector developers

R800 Transitional deliver both affordable housing and accommodation for middle- Backyard income households. This is usually Informal Informal done by requiring developers of projects above a certain threshold Monetary figures reflect monthly household income to provide a percentage of more affordable units, benefiting unplanned and insecure, with • Community residential units – households earning below R10 000 limited access to engineering CRUs include public hostels and per month. services, hazardous residential residential accommodation owned environments, and high levels of by provinces and municipalities, • Private market – The private poverty and social stress. as well as those with a private sector is a major provider of ownership component (but rental housing stock, and plays a • Backyard dwellings – excluding those to accommodate key role in urban regeneration. Notwithstanding their often poor public-sector employees); other The formal private sector rental condition, backyard dwellings public housing stock that cannot market operates primarily in remain an affordable and be transferred to individual the inner cities and suburbs, accessible option in townships ownership; and dysfunctional, producing mainly high-density and informal settlements. This abandoned, and/or distressed accommodation.

3The principles of social housing are to establish well-managed, quality rental housing options for the poor; promote safe, harmonious and socially responsible environments within the projects and in their immediate environs; facilitate the involvement of residents; support mutual acceptance of roles and responsibilities of tenants and social landlords; and ensure transparency, accountability and efficiency in property management.

12 National, provincial and local government Western Cape. The primary demand Africa is a developing nation with a share the vision of creating sustainable factors are the huge housing backlogs, developmental agenda, and government human settlements in which social, low levels of affordable housing and plays an important role in housing economic and community life can flourish. high levels of inward migration to the provision. This includes helping to meet For this vision to succeed, those who major cities. Key supply factors include demand for rental housing, and fostering supply and manage rental housing stock affordable land availability (or lack partnerships with the private sector to need to embrace an integrated approach thereof) and land release, and low levels make this a sustainable reality. to planning and delivery. Moreover, of institutional capacity at municipal and the expansion of rental accommodation provincial level. Policy and legislative requires partnerships between framework government, property developers, This strategy also recognises that the The responsibilities of each sphere of landlords, managers, communities private sector has an important role government as they relate to rental and the private sector. Such partnerships to play in the supply of rental housing housing are discussed below. are required to deliver quality housing stock. In recent years, many developed at the necessary scale and to manage countries have experienced strong growth National rental stock. in provision of rental housing in property National government seeks to create an tenure (see Annexure A: international enabling environment for a more rapid This strategy builds on our understanding trends). This trend is the result of rapid rollout of rental housing stock. National of both demand and supply factors that urbanisation, limited land availability initiatives that support rental housing influence rental housing delivery in the and the impact of state policy. South include:

13 executiveunderstanding summary the challenge

• The social housing programme, management of rental stock. have in place. The essential findings are catering for the R1 500-R7 500 per • The Provincial Growth and as follows: month income bracket. Development Strategy 2008 • The City of Cape Town has a • The CRU programme, targeting the acknowledges that the Cape Town social housing policy and a CRU R800-R3 500 per month income metropole is the most densely programme. The city is currently bracket. populated area of the province and looking into a programme for • The institutional housing subsidy, the key driver of economic growth backyard rentals. focusing on the R800-R3 500 per in the Western Cape. The iKapa • The vast majority of municipalities in month income bracket. Growth and Development Strategy the Western Cape do not have formal directs that public resources should rental housing policies, nor do they

FIGURE 3: National policy and legislative framework

Rental-housing specific Rental-housing impact Land and housing impact

• Constitution of the Republic of South • Division of Revenue Act (2004) • Development of Facilitation Act (1995) Africa (1996) • Prevention of Illegal Eviction Act • White paper on Spatial Planning and Land • The Housing Act (1997) • National Spatial Development Use Management (2001) • Breaking New Ground Framework • Land Acquisition for Sustainable Settlements • Rental Housing Act (1999) • Urban Development Framework (2008) • Rental Housing Amendment Act (2007) • Framework for the Accreditation of • Restitution of Land Rights Act (1994) • Social Housing Act (2008) Municipalities • The Land Reform Act (1996) • The Prevention of Illegal Eviction and • Municipal Finance Management Act • The Extension of Security of Tenure Act Occupation of Land Act (1998) (2003) (1997) • Community Residential Units • Municipal Systems Act (2000) • Housing Development Agency Act (2008) Programme (2008-2012) • Municipal Property Rates Act (2004) • Provision of Land and Assistance Act (1993)

The key national rental housing be aligned to areas that can support have proper property management policy and legislative imperatives are accelerated economic growth. processes in place. summarised in Figure 3. • The Provincial Spatial Development Framework highlights the need to Developing rental housing policies must Province explore rental housing potential in become a priority at municipal level. The Western Cape provincial the “leader towns”, and to give such In addition, consideration should be given government has worked to give effect to developments greater priority. to allowing the formal subdivision of land national rental housing policy: through bylaws, as is currently done in • The Department of Human Settlements’ Figure 4 on the following page some South African municipalities. Five-Year Strategic Plan prioritises summarises the provincial mandate for This process would provide the accelerated rental housing delivery. rental housing. opportunity to formalise backyard The plan focuses on social cohesion to accommodation by amending town support the development of integrated Municipalities planning schemes. Similarly, “smart and sustainable human settlements. In preparing this strategy, the Department partner” arrangements (strategic, A core focus is the development of of Human Settlements interviewed committed partnerships with identified new rental housing opportunities, municipal officials throughout the stakeholders that are beneficial to both structural and institutional change Western Cape to determine what rental parties) with SHIs should be considered and, crucially, improving property housing policies and programmes they to fast-track rental housing.

14 Policy gaps and obstacles to rental market expansion

National level There are two important gaps in the current national legislation. While backyard dwelling is recognised as a national priority, policy is still being developed, meaning that this component of the market is not yet addressed on strategic terms. In addition, the national Farm Residents Programme specifically excludes seasonal workers, placing the onus for ac- commodating such workers with farm owners. Given its large seasonal agri- cultural workforce, this is particularly problematic in the Western Cape.

In addition, there are weaknesses in the guidelines for implementation of the CRU policy, which leaves much open to interpretation. The national department is working to address this.

Provincial level Some provincial laws and regulations hinder the expansion FIGURE 4: Provincial rental housing mandate of the rental housing market: • The Land Use Planning Ordinance is The CRU policy mandates burdened with long, cumbersome The Social Housing Act provincial housing procedures that need to be followed mandates provinces to: departments to: to prepare for integrated urban development. This ordinance, as it now • Conduct audits and confirm • Submit proposals on restructuring stands, does not facilitate the efficient ownership. zones to the national department. release of land for rental housing. The • Communicate with municipalities, • Allocate funds to provincial social Western Cape government recognises residents’ associations and tenants. housing programmes. that public land and building assets • Be responsible for the application for • Receive project applications from can make a positive contribution to al- leviating poverty and facilitate access funding, secure funding commitments delivery agents, decide on extent of for the poor to urban economic op- and disburse national housing funds. top-ups, and submit them for national portunities. However, land privatisa- • Issue tenders for provincial housing approval and subsidies. tion and disposal through the sale or stock and play a support role with • Ensure compliance with national and lease of assets remain commonplace, regard to municipal stock. provincial social housing norms and providing little direct benefit to the • Monitor, evaluate and report. standards. poor or the public at large. • Provide first-line support to • Mediate in conflicts between SHIs and • The Western Cape Land Administra- municipalities. municipalities. tion Act (1998) implies that provin- • Manage project expenditure and • Develop a social housing programme cial land and buildings can be sold or deviations. and associated business plan on an leased for rental housing purposes. • Compile long-term maintenance annual basis, submitting to national However, the processes associated with this legislation are cumbersome budgets. government for approval and funding. and time-consuming. • Create rental tribunals with offices in • Administer the disbursement of municipalities. national project capital grant funding • The province needs a clear policy to • Administer the programme and its for social housing, and monitor address public housing stock under funding. progress in grant allocation. its ownership.

15 executiveunderstanding summary the challenge

Factors influencing Key findings: housing market R3 200 or less compared with 59% rental housing demand After a period of strong economic for the Central Karoo. One in three This strategy is underpinned by growth, the provincial economy is households receives some form of comprehensive analysis of available estimated to have shrunk by 1% in 2009. state grant. survey data, including the 2007 The Western Cape economy is expected Community Survey, the GHS from to grow by 2.6% in 2010, with average • Roughly one in four households various years, the 2005/06 Income growth of about 4% over the five years (375 000 across the province), live and Expenditure Survey and the 2001 to 2014.4 The chart below summarises in what appear to be inadequate Census, all sourced from Statistics South recorded economic growth rates and conditions including shacks, backyard Africa. Using this data, the department projections for the province from 2007 dwellings, overcrowded formal dwellings compiled a profile of housing demand to 2014. and formal dwellings with no sanitation. throughout the province, enabling us to Shack prevalence is highest in Eden draw key initial conclusions about potential • The number of households grew by (18% of households) and Cape Town to expand the rental market. While there 2.1% per year between 2001 and (16%). Basic dwelling conditions across are some statistical gaps, the available 2007, with Eden (2.7%) and the City districts are summarised in Figure 6 on the facing page.

Housing backlog data reported by FIGURE 5: Economic growth in the Western Cape 2007 - 2014 the Parliamentary Monitoring Group indicates a slightly lower need, as summarised in Figure 7. 6 5.8

4.7 4.4 4.4 Key findings: rental market 4 3.5 3.7 Given the significant backlog and limits

2.6 on affordability, the rental market is 2 critical. It is also critical that the solution be aligned with household needs, and the rental market can provide 0 such flexibility. -1

-2 One-quarter of households in the Western Cape rent their primary dwellings. Data from the GHS from Source: 2009/10 Provincial Economic Review. Figures for 2007 and 2008 are actual, the 2009 figure is an estimate, and the subsequent years are projections. 2002 to 2007 show a noticeable shift towards ownership, reflecting a bias embedded in national housing policy. data overwhelmingly suggests strong of Cape Town (2.5%) the fastest- Households with monthly earnings of demand for affordable rental housing. growing districts over this period. between R3 501 and R7 500 (the Comprehensive expansion of the rental social housing target market) constitute housing programme will require further • About 38% of households had a 28% of the rental market. research, as discussed later in this report. monthly household income of R3 200 or less in 2007, with noticeable Figure 8 summarises data from the This section summarises key findings of differences in income distribution Income and Expenditure Survey on the demand analysis, which is found in across districts. In Cape Town 35% of rentals for the province as a whole. It the online annexures. households have a monthly income of appears that lower-income households

4This section is based on the 2009/10 Provincial Economic Review and Outlook published by the Western Cape Provincial Treasury

16 FIGURE 6: housing conditions in the western cape

City of Cape Central district council Eden West Coast Overberg Cape Town Winelands Karoo Number of Households: 902 278 173 347 141 577 76 215 60 056 15 708 % % % % % % Housing type Dwelling on separate stand 66 62 72 85 83 89 Flat/house/room 16 20 5 8 4 8 Shack not in backyard (e.g. informal 9 5 9 2 5 1 settlement) Shack in backyard 6 5 9 3 5 1 Backyard dwelling 1 1 1 1 1 1 Other 1 2 4 2 2 1 Worker’s hostel 1 5 0 0 0 0

Housing tenure Owned, fully paid 40 33 47 50 46 60 Owned, not fully paid 24 11 15 14 10 10 Rented 22 30 20 20 23 16 Rent-free 13 22 17 15 20 12 Other 1 3 2 1 1 1 Adequacy Adequate 73 74 64 74 75 80 Inadequate 27 26 36 26 25 20

Receives any form of state grant Yes 29 37 35 30 31 57 None 71 63 65 70 69 43 Monthly household income < R1 601 22 23 26 21 22 32 R1 601 – R3 200 14 20 20 21 14 27 R3 201 – R6 400 13 19 17 20 14 16 R6 401 – R12 800 11 11 10 14 9 9 R12 801 + 19 10 10 13 9 7 No response 21 16 16 11 31 9 Household work status Formal 70 77 62 73 57 62 Domestic or informal 11 5 12 9 7 9 Other employment 2 2 5 6 4 3 None 18 16 21 12 33 27

(defined as those with an income below accommodation at a scale that is Significant growth R3 500 per month) spend about 24% affordable to the many lower-income of their incomes on rent, although this households. A strategy to augment in shack rentals is clearly a function of location (and provision and improve the quality of indicates that demand by implication transport costs) dwelling backyard accommodation is critical. for affordable rental quality and availability of services. Data from the GHS indicates significant In light of these facts, the Rental Housing accommodation growth in shack rentals, indicating Strategy will prioritise developing has outstripped that demand for affordable rental the rental market among households formal supply accommodation has outstripped with monthly income below R7 500. formal supply. The data highlights a Initial efforts will focus on expanding key challenge: to provide adequate CRUs, social housing and the use of

17 understandingexecutive summary the challenge

FIGURE 7: provincial housing backlog These areas were selected specifically for the delivery of social housing. The delivery of CRU is stressed for all towns in the province. In addition, a second category of towns was identified to phase in rental housing delivery. The West Coast district, which includes Saldanha and Malmesbury, is profiled in this category.

A key factor in selecting these eight priority towns is the concentration of housing demand compared with other Source: Parliamentary Monitoring Group towns in the province. Moreover, these eight towns are characterised by: • Sizeable populations, from which sufficient target market segments institutional subsidies.5 National policies where to prioritise rental housing. The can be drawn to justify the cost covering backyard rental dwellings Provincial Spatial Development Framework of investment in rental stock and and small-scale landlords remain under identifies 15 Western Cape “leader management structures. development. The Western Cape is towns” that have good growth potential, • Affordability within the target market investigating developing its own policies and which should receive infrastructural segments. in this regard. investment and support. For purposes of • A positive balance of “push-pull” this strategy, the Department of Human factors influencing choice. These Housing demand in the leader towns Settlements has selected, in addition to include economic activity and growth, Economic growth and stability, along Cape Town, eight of these areas as “first community access, opportunities with employment, are important factors priority” towns: George, Knysna, Mossel and amenities, as well as shortages in households’ ability to pay rent over a Bay, Worcester, Hermanus, Stellenbosch, and inadequacy of other forms of sustained period of time, and such factors Paarl and Wellington. accommodation. need to be considered in decisions about

FIGURE 8: provincial household rental summary

(R850 – (R1 500 – (R3 500 – (R7 500 – Monthly household income < R850 R10 000 + R1 500) R3 500) R7 500) R10 000) Number of households in the 79 882 113 433 355 050 269 144 96 713 357 319 Province

Percentage of the rental market 5% 6% 31% 28% 10% 20%

Percentage in the segment who rent 20% 15% 25% 31% 31% 17% their primary dwellings

Average rent to income ratio 22% 11% 27% 17% 30% 15%

5An institutional subsidy is paid out to an organisation (a registered company, cooperative or association) that contributes to building a housing project. The houses built in this project belong to the organisation for at least four years after completion, after which the house may be sold or transferred to the beneficiary, or the beneficiary can apply for a housing subsidy for another property. The institutional subsidy provides a standard rate for every household earning less than R3 500 per month

18 FIGURE 9: Rental demand in leader towns

Number of Household income Housing demand Municipality Population size households

City of Cape Town 3 497 000 902 000 22% 14% 306 800 Not available

George 136 500 42 800 28% 18% 14 900 1 700

Knysna 65 000 17 400 22% 21% 11 500 Not available

Mossel Bay 118 000 28 000 29% 18% 9 000 Not available

Breede Valley (Worcester) 134 000 36 500 24% 25% 13 500 5 000

Overstrand (Hermanus) 74 500 22 000 27% 14% 10 200 3 060

Stellenbosch 200 500 36 400 24% 12% 19 800 15 840

Drakenstein 217 000 51 600 21% 18% 40 000 20 000 (Paarl & Wellington)

Compiled from various sources and interviews

The table above profiles the rental households is shown by the rapid Company, Communicare and the Cape demand of the eight leader towns. growth in “informal” supply. Given this Town Community Housing Company reality, it is necessary to establish formal (CTCHC). The highest demand is in the lowest- arrangements with small-scale landlords, income category, which is also where backyard dwellers and the owners of These units were mainly funded by the shacks and backyard dwellings farms employing seasonal workers to institutional subsidy, and some hostel predominate. Consequently, the Rental give impetus to the rental strategy. upgrading was funded by the Hostels to Housing Strategy will concentrate on low- Homes programme. All of these units were income households. The data also shows a lack of better- built in Cape Town. Since the introduction located housing for families on incomes of of the social housing capital restructuring Factors influencing between R1 500 and R7 500 a month. grant in 2006, only 450 new social rental housing supply High prices for land and accommodation housing units have been delivered in The Western Cape needs to increase prevent these households from obtaining restructuring zones, with a further 219 the supply of low-cost, well-located rental access to ownership in the better-located now under construction. The first RUC housing, of which social housing is a key parts of towns. Government-supported projects are now being approved component. However, a large proportion rental programmes can help bridge in Cape Town, but these are all for of rental housing demand is found among this gap. refurbishment of existing flats, and no new lower-income households (R800 to R3 500 units are being created for this market. per month) that would not necessarily be Previous performance able to afford social housing. State-funded rental housing in the Regional variation in supply Western Cape has not performed well. Since 1994, nearly all hostel upgrading In addition to social housing initiatives, Over the past 15 years, fewer than in the Western Cape, as well as policy will also prioritise CRU, backyard 2 500 new social housing rental and provision of new social housing stock, rental and institutional subsidy delivery. rent-to-buy units were provided by the has been in Cape Town. Of the city’s Strong demand among lower-income three main SHIs – the Social Housing 43 500 municipal rental units, an

19 understandingexecutive summary the challenge

estimated 30% are in slum condition. planning approvals. Municipalities Small-scale landlords Cape Winelands also has significant will require provincial support for these numbers of existing municipal rental processes. Small-scale and informal landlords stock, most of it in poor condition. Rental provide a significant amount of stock in other districts is numerically Institutional capacity rental housing. There are an esti- insignificant, and no new rental units The City of Cape Town maintains an mated 200 000 – 300 000 informal have been produced since 1994. experienced but overloaded rental unit. backyard renters in Cape Town Leader town municipalities with potential alone, with 36 000 in Winelands, 23 000 in Eden, 14 000 in Over- Land and packaging for rental housing generally lack the berg and 11 600 in West Coast. In Cape Town and the leader towns institutional arrangements and staff to This sector is not regulated and of the West Coast, Cape Winelands, manage existing or new municipal rental receives no direct state support. Overberg and Eden districts, there stock, and to drive new rental housing It does, however, present munici- are limited quantities of well-situated, delivery effectively. Typically, one palities with a “hidden” burden state-owned land suitable for formal municipal official is responsible not only on services without the necessary state-funded rental housing. All of these for rental housing, but also for a range cost recovery. towns have made provision for land to of other programmes. Provincial support be earmarked for rental housing in their is required to enhance capacity in towns human settlement plans. The identification such as George/Knysna, Stellenbosch, of land should include both greenfield Paarl/Wellington and Saldanha. is a responsibility of the public sector. sites and infill sites. The specific land Second, SHIs have to gear up their parcels must be officially allocated and Furthermore, SHIs’ ability to grow is internal property management capacity released for rental, following which limited by two factors. First, SHIs find rapidly, but experience suggests that they need to be “packaged” through themselves in the position of having it takes up to 18 months to establish environmental authorisation and town to identify and package land, which the requisite competence. Increased assistance from government to identify land, to help establish new SHIs, or to help municipalities upgrade their property management capacity would relieve the pressure in this area.

Role of the private sector Earlier this year the Social Housing Foundation (SHF) released a study entitled Strategy for Increasing Supply of Small-Scale Private Dwelling Rental in South Africa. This study shows that the formal private sector is reluctant to provide information about tenant profiles, levels of affordability, rentals charged and property management processes. Such information would be valuable in honing the Rental Housing Strategy. The study does show, however, that the formal private sector is willing to participate in expanding provision and management of rental housing, provided that the legislative and policy initiatives address its needs.

20 2| A Five-Year Growth Trajectory for Rental Housing

Projections across the province Figure 10 on the following page shows the number of potential rental housing units identified by the municipality in the Western Cape. These projections are based on local government assessments of suitable municipal land for rental housing, and have been published in the spatial development frameworks and/ or the housing sector plans of integrated development plans. Turning these projections into reality will form the heart of the Rental Housing Strategy.

Social housing can be increased significantly in Cape Town, where delivery and management capacity exist. However, more dedicated funding is needed. Over the next two years, the encouraged where there is institutional landlords should be established, and City of Cape Town will be accredited as capacity for property management – or, ways explored in which this sector can a housing provider, resulting in a direct if such capacity is absent, where the be structured without driving up costs budget allocation to the city. This also provincial government can provide for renters. gives the city the right to determine its support. Specific land parcels for all own delivery programme, which may or forms of state-funded rental should be The provincial government should also may not focus on rental housing delivery. identified, allocated and released, and initiate a forum for engagement and packaged according to a prioritised cooperation with the formal private Social housing can also be expanded to pipeline monitored by the provincial sector, including property developers, the Eden, Cape Winelands and West steering committees for social housing property managers, farm owners and Coast districts, provided restructuring and CRUs respectively. funders. This strategy will promote zones are established, institutional private-sector participation in the lower capacity is improved with provincial The provincial Department of Human end of the market. support, and delivery agents are either Settlements needs to investigate the strengthened or newly established. viability of using the institutional subsidy Strengthening internal as an instrument for providing affordable capacity, stakeholder Cape Town has the potential to develop rental alternatives to social housing relationships and and manage new CRU stock, although and CRUs – such as rental with shared research this must be seen in the context of facilities for seasonal farm workers and Structure of the rental unit significant challenges in both property other temporary renters. To effectively implement this strategy, management and rental collection. the department intends to expand the There is also a need for CRU stock A forum for engagement and responsibilities of the rental unit over the in the leader towns. CRUs should be cooperation with informal and backyard period ahead.

21 aexecutive five-year summary growth trajectory

FIGURE 10: Proposed expansion of rental housing, 2010-2014

Area 2010 2011 2012 2013 2014 TOTAL

District Municipality Social housing CRU SH CRU SH CRU SH CRU SH CRU SH CRU 270 320 664 280 1 150 360 650 400 780 400 3 514 1 760 Steenberg - 150 Kewtown Dillon Lane - 64 Not identified Belhar - 300 Not identified Wetton - 400 Not identified Wingfield & Not identified Bothasig - 120 Bo-Kaap - 100 Montclair - 200 Royal Maitland - Pickwick & Cape Town Belhar - 300 Brooklyn - 250 100 District 6 Montclair - 200 Rugby - 200 District 6 - 150 Pine Rd - 150 136 160 296 Portion of erf 327 North of Main Swartland Malmesbury - 108 Road, Darling Erf 19,20, 1766, West Coast Malmesbury - 28 250 500 250 1 000 Proposed IDZ be- Proposed IDZ Proposed IDZ between Saldanha tween Saldanha/ between Saldan- Saldanha/ Vredenburg Vredenburg ha/ Vredenburg 255 100 100 247 355 347 DeKraal pilot Vlakkeland, Vlakkeland Vlakkeland - 100 Paarl - 68 Wellington R301/R302 Drakenstein Pentz Rd, Wellington - 42 Wellington - 87 Mbekweni Station - 105 Vlakkeland, Wellington -100 120 180 300 Zolani hostel, Nqubela hostel, Langeberg Ashton Robertson Winelands 100 240 490 96 250 250 196 1 230 Erf 4027, Erf 1, Worcester Worcester: Erf Erf 3389, Worcester: erf Worcester: erf 1-240 Breede Valley Worcester 1-240 Erf1 1810+ Worcester 1-240 Erf1 1820+ Erf1 1820+ 20800-250 20800-250 20800-250 200 200 250 500 280 570 280 200 1 010 1 470 “Tender 34” 7001 Waterkant IRDP, Nietvoorbij farm, Waterkant - 250 Nietvoorbij farm, Not identified Nietvoorbij farm, Not identified Stellenbosch & 8915, Khayamandi Idas Valley Not identified - Idas Valley (Cloetesville Idas Valley (Cloetesville Onder Cloetesville erf 250 Onder Papegaaiberg) 235 & 5652 Papegaaiberg) 152 180 130 200 220 200 280 200 782 780 Knysna Erf 3409, 3326, Erf RE/523 Erf 3409, 3326, Erf RE/523 Heidevallei Erf RE/523 Heidevallei Simola, Founders Estate, 3260, Hornlee Kruisfontein 3260, Hornlee Kruisfontein Integrated Project Kruisfontein Integrated Project Lakeview 160 150 250 280 280 240 240 300 930 970 York Str hostel - 20 Blanco - Erf RE/ 464-150 Erf 323 & 7/202, Erf RE/ 464-180 Erf 12/195 Erf 9/142 George Erf 12/195 George Municipal site, not identified Erf 323 & 7/202, Pacaltsdorp - 100 Erf 323 & 7/202, George farms, farms farms, Thembalethu George Eden cnr Meade & Pacaltsdorp - 100 Pacaltsdorp - 100 Thembalethu Cathedral - 24 Erf RE/464-116 180 120 180 180 240 200 240 500 840 Erf 1260, Integrated Project, Integrated Project, Integrated Project, Integrated Project, Integrated Project, Integrated Project, Erf Mossel Bay Kwanonqabu Erf 1712/1717 Erf 1712/1717 Erf 1712/1717 Erf 1712/1717 Erf 1712/1717 1712/1717 south of N2 south of N2 south of N2 south of N2 south of N2 south of N2 120 150 180 180 630 Overberg Overstrand Not identified - Not identified - Not identified - Not identified - Zwelihle Zwelihle Zwelihle Zwelihle

TOTAL 270 320 1 276 1 606 1 900 2 750 1 961 2 680 1 880 2 267 7 287 9 623

22 Area 2010 2011 2012 2013 2014 TOTAL

TOTAL 270 320 1 276 1 606 1 900 2 750 1 961 2 680 1 880 2 267 7 287 9 623

23 executivea five-year summary growth trajectory

In a recent internal restructuring process, should be incorporated to ensure more processes to ensure a clear and the rental unit was grouped with the gap accurate analysis of the rental market: transparent method of adding housing unit in a new directorate for • Identify key research hypotheses the names of households and/or affordable housing. The present structure, and additional data gaps. This may individuals to such lists, and keeping however, contributes to a lack of focus by include strengthening the rationale such lists up to date. It would also the top management of the rental housing for additional investment, quantifying include some standardisation to unit. The department will work to address demand, identifying key development ensure that the way in which tenure these challenges, and to create a more areas or assessing the performance of preferences are captured is sensible enabling environment for rental housing rental stock across the province. and comparable across provinces. to flourish. Available options include • Develop a survey to refine the current the unit creating a pool of specialists profile of renter households, as well as Key constraints and in the necessary disciplines to service the scope and character of potential opportunities the whole province, or establishing a demand, such as willingness to pay As noted above, capacity constraints section consisting of generalists who for rentals. at both provincial and municipal level service specific districts. Performance • Gather provider data on activity levels affect the expansion of the rental housing management systems must be enhanced and usage as a first step to standardise programme. In Figure 11 below, we and aligned to ensure delivery of the the capture of data for new social consider other areas of opportunity and rental housing programme. housing project applications. This constraints to be overcome. process would include a mechanism To function efficiently, the rental unit for periodic collection of operational The department will work to alleviate these depends largely on other directorates indicators from rental housing providers. constraints as the strategy gathers pace. in the department. Many of these • Standardise housing waiting-list arrangements, however, suffer from a lack of formal structure. In addition, the existing service offering is largely geared FIGURE 11: Key constraints and opportunities towards RDP housing delivery. The way Policy Demand Supply in which the other directorates provide considerations considerations considerations support will need to be realigned, with service-level agreements to support The Social Housing Act, the While statistics show There is some existing public rental quality performance from these units. Social Housing Regulatory a strong demand stock. The strategy points to the Authority, CRU policy and the for housing, a possibility of extending restructuring Working with stakeholders institutional subsidy all provide thriving rental market zones to leader towns, making The rental housing unit also depends opportunities to expand rental and areas of high more municipal land available, on external partnerships to deliver on housing. Constraints in this economic growth, growing the project pipeline and its mandate. Over the period ahead, area include: constraints include the improving project management. • Preferential land release following: Constraints include: the unit will work to strengthen these policy • There is no • Lack of land identification, relationships, as shown in Figure 12 on • Formal SHI partnership dedicated profile of allocation and release the facing page. policy demand for rental • Insufficient capacity of delivery • CRU guidelines housing agents Setting the research agenda • Backyard rental • Lack of affordability • Poor municipal systems and The statistics on which this strategy is programme • Waiting list lack of capacity to deliver based are drawn from multiple surveys • Farm worker policy and reliability and • Poor planning and policy programme definition of • Complexity of land packaging over different time periods. A range • Small-scale landlord criteria. • Grant/subsidy funding of data gaps is evident, making these policy allocations statistics inadequate for comprehensive • Town planning • High property management policy design. Over the period ahead, the amendment policy for costs and lack of property Rental Housing Strategy must define the municipalities. management capacity. research agenda. The following factors

24 FIGURE 12: Stakeholder relationships

Current Stakeholder Provincial need Next steps relationship EXTERNAL STAKEHOLDERS Housing Development Land identification and feasibility Formalise request for a partnership Agency studies Municipalities • Land Unit provides • Initiate capacity-building • Services subsidy and grant programme • Project pipeline administration • Align infrastructure process • Project applications • Land availability and release • Rental housing strategies and • Project packaging and pipeline support programmes developments • Special dispensation for utilities, • Support programme for SHIs rates and taxes SHF and its successor Build capacity in provincial rental SHF provides technical Formalise memorandum of under- unit and municipalities assistance standing (MOU) to continue support Social Housing Regulatory • Accreditation of delivery agents Regulatory authority The regulations prescribe a formal Authority and register of accredited not yet established MOU between provinces and the projects Social Housing Regulatory Authority • Regulation of delivery agents • Investment programme and alignment of funding including capital restructuring grant SHIs Property development and Indirect relationship Smart Partner policy will formalise management through municipalities relationship National Association SHI mobilisation and facilitation Participates in Formalise MOU of Social Housing provincial steering Organisations committee meetings National Housing Finance Debt and feasibility funding Participates in Formalise MOU through Social Corporation (NHFC) provincial steering Housing Regulatory Authority committee meetings Nongovernmental Community engagement and Direct Create a think tank forum and community-based social facilitation and support to organisations the dept’s research agenda Higher learning institutions Research agenda for strategic Direct Create a think tank forum planning Private sector (developers, • Property development Direct • Establish rental housing network managers) • Property management • Assess management capacity and willingness to participate in delivery programme • Assist with Social Housing Regulatory Authority accreditation Funders and financiers Funding • Rental housing investment programme • Request partnership Construction sector • Construction standards Direct – departmental Request partnership • Projects registered with National inspectors Home Builders Registration Council National departments • Infrastructure development Direct Intergovernmental relations • Land and buildings • Land policy direction

25 executivestrategic summarygoals

3| Strategic goals

here are four key factors that The four goals are: housing programmes, new use of the affect supply and demand of 1. Build a suitably structured institutional subsidy, and development housing stock, as summarised in organisation that is responsive to of the backyard dwellers’ programme. Figure 13 below. rental housing These initiatives will be carried out T in line with the broader policy goals of overcoming our inherited spatial FIGURE 13: Key factors affecting supply and demand legacy, and promoting inclusivity and sustainability. Programme objectives are Productivity Inclusivity as follows: Economic infrastructure and services, Pro-poor services and infrastructure • Develop and deliver research agenda and developing the rates base for rental housing Supply & Demand • Create long-term planning frameworks Governance Sustainability for rental housing delivery for leader Management of the processes of Ensuring policy, financial, towns participation and regulatory environment and institutional stability • Provincial land programme of public spaces and institutions (identification, allocation and release) • Technical support programme for packaging municipal projects • Social housing delivery programme An efficient, effective structure is • CRU delivery programme The Rental Housing Strategy assumes needed to implement the strategy. • Develop models for use of the that in an environment of limited public The department will strengthen its rental institutional subsidy resources, government and its partners housing unit, and work to realign this • Develop backyard rental programme will need to take tough decisions and unit’s responsibilities with those of other • Small-scale landlord programme. make trade-offs to ensure the expansion directorates. Programme objectives are of rental housing stock in the province. as follows: In some areas, for example, economic • An adequately capacitated rental considerations may have greater housing directorate weight; in other areas, ensuring access • Develop and approve provincial Given limited public to services may sway a decision. In all strategy and policies cases, these four principles will take • Capacitated and supported local resources, tough into account long-term built environment government to plan for rental housing decisions and trade-offs planning frameworks, including issues of • Partnerships with other directorates in densification, location and quality. the department are required • Strategic partnerships with key rental Flowing from the analysis presented housing support organisations. in Section 1, this strategy commits the Western Cape to four strategic goals. 2. Increase the supply of targeted, Progress towards realising these goals state-funded rental housing 3. Expand the supply of private-sector will help the provincial government The department will ensure that state- rental housing for the lower-income achieve its objectives of delivering clean, funded rental housing supply is increased market efficient, cost-effective, transparent and effectively to benefit low- to middle- The department will work to increase its responsive public administration, and income households. The primary focus understanding of rental housing supply optimising human settlement integration. will be the existing CRU and social (formal and informal) by the private

26 sector. Improved understanding will 4. Create viable property management These goals have been formulated to help to underpin partnerships, incentives capacity, arrangements and systems maximise impact in the areas where and regulation to increase and manage The department will support the creation the Department of Human Settlements the supply of acceptable rental housing of sufficient property management exercises strategic control. These areas stock. Programme objectives are capacity to realise the delivery targets. include institutional arrangements and as follows: This will include providing assistance departmental functions, investment • Private sector (formal) – research to municipalities and SHIs, promoting programmes (including subsidies/grants), sector needs for participation in consumer education and enhancing the regulatory sphere and developing rental housing programmes, develop regulation of landlord-tenant relations. strategic partnerships. engagement programme and process, Programme objectives are as follows: and launch the programme. • SHI rental housing support programme Priority delivery areas • Private sector (informal) – research • Mobilise additional property The table below provides an overview of small-scale landlords and develop management capacity the priority areas of delivery over the next alternative models for rental housing. • Technical support for property five years. management capacity

27 strategicexecutive summarygoals

FIGURE 14: Delivering on strategic priorities

Priority area YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 2010/11 2011/12 2012/13 2013/14 2014/15 Build a suitably - Develop internal policies and Training and Ongoing Ongoing Ongoing structured procedures development organisation that - Training and development programme is responsive to programme rental housing - Organisation structure needs confirmation

- Rental housing strategy Backyard rental Implement Ongoing Ongoing - Communication strategy strategy developed strategy - Preferential land release policy - SHI Partnership policy - CRU guidelines - CRU regulations - Assessment tools for CRU - Farm worker policy and programme - Small-scale landlord policy - Town planning scheme amendment policy

- Capacitation programme for - Annual review of - Annual - Annual - Annual rental housing strategy review of review of review of - Inclusion in housing sector plans - Support to implement strategy strategy strategy - Training programme for strategic programme - Support to - Support to - Support to municipalities - M&E process implement implement implement - Annual review of Rental Housing strategic strategic strategic Strategy programme programme programme - M&E process for municipal - M&E - M&E - M&E planning for rental housing

Formalise institutional arrangement Manage stakeholder Ongoing Ongoing Ongoing relations - Think tank for NGOs, CBOs and Launch rental housing Manage Ongoing Ongoing higher-learning institutions network network - Partnership agreement with Housing Development Authority - MOU with municipalities, SHF, Social Housing Regulatory Authority, National Association of Social Housing Organisations - SHI Smart Partner policy

Increase the - Rental demand key research Rental market demand Incorporate Incorporate Incorporate supply of targeted, hypothesis survey into rental into rental into rental state-funded rental - Key areas for rental stock programme programme programme housing development - Standardised data capture tool for new social housing projects

28 Priority area YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 2010/11 2011/12 2012/13 2013/14 2014/15 Increase the Long-term planning frameworks Ongoing Ongoing Ongoing Ongoing supply of targeted, where provincial government helps state-funded rental municipalities with housing sector housing plans Provincial land programme Provincial land Provincial land Ongoing Ongoing programme programme

Technical support programme Technical support Ongoing Ongoing Ongoing to municipalities for project programme to packaging municipalities for project packaging - Restructuring zones M&E M&E M&E M&E - M&E - Social housing project pipeline - Building and tenant audit M&E M&E M&E M&E - New stock funding process - M&E Models for use of Implementation Review Ongoing institutional subsidy models Backyard rental Implementation Ongoing Ongoing programme developed of programme Small-scale landlord Implementation Ongoing Ongoing programme developed of programme

Expand supply Private-sector formal research study Private-sector formal Incorporate Ongoing Ongoing of private-sector research study into rental rental housing programme for lower-income Private-sector formal research study Private-sector formal Incorporate Ongoing Ongoing market research study into rental programme Private-sector investor Manage forum Manage Manage and developers forum forum forum launched Funding models Implement Review Review developed models models models

Create viable SHI property management support SHI property Ongoing Ongoing Ongoing property programme management support management programme capacity, Property management Ongoing Ongoing Ongoing arrangements and forum systems Technical support programme to Technical support Ongoing Ongoing Ongoing municipalities programme to municipalities Tenant education Tenant education Ongoing Ongoing Ongoing

29 For more information: Mr. Anwar Swartz Rental Housing Tel: 021-483 2584 Fax: 021-483 6617 E-mail: [email protected] Website: www.capegateway.gov.za