HSRC/CPEG PARLIAMENTARY BRIEFING: HOUSING

1. HSRC/CPEG PARLIAMENTARY BRIEFING: HOUSING PROJECT: IPDM SETTLEMENT TYPOLOGY AND DEMAND PROFILING 20 OCTOBER 2008

2. A WORLD FUTURE OF SLUMS? The UNFPA’s recent State of the World Population Report 2007 points to a global future with slums surrounding most major cities of the developing world Almost alone, South Africa is out in front of this trend – • National anti-poverty policy is already striving to place the urbanizing poor into serviced housing before slums can lock down • And is working to reduce shack areas by replacing them with government housing • This policy thrust leads the world – and it is vital to national poverty reduction goals that housing delivery moves fast Fast sure housing delivery requires accurate targeting –

3. HSRC HOUSING RESEARCH IMPACTS • PROJECT: INTEGRATED PLANNING, DEVELOPMENT & MODELLING (IPDM) • DST Technology for Social Impacts; HSRC + CSIR partnership • HSRC component: Demographics of housing and settlement • HSRC focus: Local government delivery of housing and services, at community level • Product: Ground-breaking new approach to targeting housing delivery – and: • HSRC’s research results also underscore the overall success of government housing delivery, and • Highlight the role of government subsidy housing in generating a rising wave of good quality self-build housingacross both urban and rural sectors By complementing subsidy housing, this new government-initiated housing trend introduces a new delivery mode – Subsidy housing + self-build can help complete government’s task of housing the poor faster + at lower cost to the fiscus

4. PRESENTATION This presentation will look first at defining and targeting housing demand • Focus: HSRC’s demographic settlement typology • and the wall charts for settlement type • New ways to help target beneficiaries with the right type of housing Second, it looks at research findings from the IPDM 3000-case survey • Focus: how self-build housing is spreading in response to government’s subsidy housing programme • With some national implications

5. 1, TARGETING: HOUSING AGAINST POVERTY Government’s basic approach to economic equality has been housing-based asset accumulation (Hirsch 2005) • Government provides poor families free housing as a platform for self-investment and saving • And counts on them to move successfully into the national economy as earners and participating citizens This approach depends on families receiving the right kind of housing asset to meet their needs • If the right housing is not delivered, beneficiaries often sell their subsidy houses at very cheap prices This risk is associated with ineffective targeting and can chip away the asset value of subsidy housing delivery

6. TARGETING HOUSING AT COMMUNITY LEVEL The Breaking New Ground housing policy allows for a range of subsidy housing options – now, new inclusionary options Recent decisions also encourage self-build housing – Housing goes in at IDP level, but there is a blank here in planning data – delivery is flying blind • At community level where lack of targeting data is slowing down delivery of housing • Government does not yet produce community-level targeting data for housing delivery – • HSRC’s settlement demographics research is moving toward addressing this gap • This work is developing evidence-based local-level targets to support faster delivery

7. PLANNING NEEDS AT THE I D P LEVEL For delivery planning to work at the local level, it needs to break down the municipal target population • At community level, where delivery goes in • The breakdown has to estimate IDP delivery targets • And figure in migration, as the single main disruptor of population projections • And come out very accessible and user-friendly, aligned for municipalities with little time for data work • HSRC has tackled this problem through a demographic approach to a new kind of settlement analysis

8. HSRC’S APPROACH: SETTLEMENT TYPOLOGY IPDM’s housing demand profiler provides a new type of evidence-based settlement typology – • It clarifies the kinds of demographic population found in the different types of: • Shack areas • Rental accommodations • Formal housing types • Government subsidy housing schemes • And so on – more than 40 categories of self-built and formally delivered housing have been identified – • Each has a different demographic profile that determines demand for housing and services If we unpack these, demand can be estimated locally and also provincially to make the right housing match

9. USING SETTLEMENT TYPES TO CREATE DEMAND PROFILES To attach the demand profiles to the settlement types • We bring the key types into focus from the ground up, starting with qualitative work and going on to the large questionnaire survey • IPDM’s survey dataset covers roughly 3000 cases in Gauteng, Mpumalanga and Sekhukhune Each settlement type has its own population structure • For instance: shack housing can include informal site-rental, shack rental and ownership among other options: it can be infill or free-standing, central or peripheral All the types have different demographics and income levels – • Knowing household size and structure gives range estimates of housing demand per type

10. WHY A NEED FOR DEMOGRAPHIC PROFILES? Why is this important for municipalities and for national? • The kind of subsidy housing being delivered often fits the need of the delivery agency, not of the community – • N2 Gateway? Cape Town put in rental housing not well matched to the demographic Delivering the wrong housing type can result in the houses being sold right away – • On the informal market, at prices well below delivery cost • This kind of instability undermines subsidies to the poor – subsidized housing goes to the well off HSRC’s housing demand estimates are available now for the survey area – • The settlement typology wall charts in IPDM’s Toolkit for Integrated Planning areonline at http://tip.csir.co.za

11. Old traditional homesteads New traditional homesteads Rural modern village Self-development Formal urban townships Formal rural townships PHP subsidized housing Informal, central or infill Informal, periph or rural Upgraded informal RDP subsidy housing Backyard shacks Old hostels Upgraded hostels 15. Urban flats 16. Cluster housing 17. Other urban Guide charts give by district and settlement type: Number units needed (range estimate) Type units needed Household size % female head Potential h/hold size to rise % out of work Average h/hold income POVERTY-LINKED SETTLEMENT TYPES, MPUMALANGA CHART

12. HOUSING DEMAND GUIDE CHARTEXAMPLE, NORTHERN MPUMALANGA

13. 2: SPECIFIC FINDINGS, 1 IPDM findings help to validate the present direction of housing policy: the survey data shows • Poverty-relevant housing stock increasing rapidly everywhere • Self-build housing of decent quality spreading fast in the rural sector • Government subsidy housing delivery has been very successful: • 10% of all urban and rural housing surveyed • Informal self-development areas, modern-type decent-quality housing developments equivalent to RDP, but built by the poor on informal land: • 8% of all housing surveyed • Decent-quality owner-built housing stock in South Africa’s poor communities appears in other settlement types too: • Self-build good-quality housing = 35% of housing overall • Municipalities are reported to be providing services rapidly

14. SPECIFIC FINDINGS, 2 SA’s poor are steadily building up assets and moving into the housing market: • Slum areas of shack-type housing: • 21% only – far fewer than the good-quality owner-built dwellings • Traditional rural settlement areas: • 12% – but traditional settlement appears to be disappearing fast - families are turning to brick housing • This trend will transform the rural areas and start this group moving to town • The old townships: • 27%, the largest single settlement type – 12% are self-built • Rural villages with non-traditional housing : • 21% now – village families are very poor but 70%+ now have decent-quality self-built dwellings • Estimated replacement value, self-build housing: • R 10 000-R 25 000 per unit, urban areas often R 50 000+ A community with 1000 self-build units has housing assets worth R 10-25 million on the informal market • 1000 shacks’ market value would be R 1.2-R 2.5 million

15. FINDINGS: IMPLICATIONS Important implications include: 1. Subsidy housing delivery seems to have raised housing aspirations among the poor • And sparked a cascading expansion of good self-build housing stock 2. Household-level capital formation through housing assets is reported on a large scale in poverty communities • This trend validates government’s anti-poverty strategy 3. Investment in family housing appears to be rapidly replacingtraditional savings in livestock • Poor rural communities are engaging with the cash economy 4. Self-build decent-quality housing concentrates in areas with less subsidy housing and in outlying areas relying on social grants for survival – • It looks as if some income from social grants is going to family housing investment and capital formation Favourable trends are unfolding now – but with risks

16. OPTIONS IN CONTEXT HSRC’s IPDM findings point to entry to the developed economy via support to self-build good-quality housing – But the self-help housing trend may be double-edged: NSDP policy points to risks for families self-investing in areas with low economic potential – • Rural housing markets offer cheap land fast – but are not always liquid • Investment in outlying areas may tie families into a collapsing rural land economy • Risk of grant dependency, costly transport and poor access to jobs? Against these risks – Many rural and peri-urban families seem to be voting with their bricks for living outside the cities • A significant part of the rural population is resisting pressures to locate in urban areas The most popular self-chosen areas for owner-built good housing are now in the metro peripheries

17. RECOMMENDATIONS In this light, recommendations include: • Build on the developmental momentum of subsidy housing delivery • Work with informal land delivery in the settlement types where this can happen without extreme density risks • Support self-build options: • Increase South Africa’s stock of good quality housing • Accelerate household capital formation for accumulation and market engagement • Consider suburban-type peripheral development with mass transit: • Work on options for the outlying areas that now produce decent self-build housing – • These are still excluded by distance factors from economic participation – so: • Look closely at transport costs – reduce the spatial-distance penalty for peripheral and rural owner-built good housing SA cannot bring all its poor into the core cities – land is expensive, the cities resist, and many poor families don’t want to live there

18. THANK YOU! HSRC 20 October 2008