Abstract
M.Com. ( Business Management)
The dire shortage of low cost housing in South Africa has a detrimental effect on
both the social and economic welfare of the country.
On comparison of the percentage that housing construction comprises of the Gross
Domestic Product in South Africa to the international experience, it becomes clear
that this country lags behind the international trend for countries on a comparable
level of economic development. Given the multiplier effect that construction causes
in the economy, the importance of increased expenditure on housing become
paramount.The current shortage of low cost housing, especially amongst the black population
is partly the legacy of the policy of separate development followed by the National
Party since 1948. Because black people were regarded as temporary citizens
insufficient funds were allocated by the fiscus in the national budget. The shortage
of low cost housing has increased to the point where the backlog of houses is
estimate at 188 000 houses.This is beyond the ability of the fiscus to address.
The need to mobilise private sector finance in the quest to eradicate this backlog is
clear. Efforts by the government to supply low cost housing has met with limited
success due to intervention by the mass based organisations, such as the South
African National Civics Organisation. The financial institutions has withdrawn from
the low cost housing market because of the losses suffered as a result of the bond
boycott.
A further factor inhibiting low cost housing development is the plethora of rules and
regulations governing township development. The high standard of servicing
required for a stand has placed the price of a serviced stand outside the affordability
of the financially disadvantaged part of the population. The need to apply third
world standard to a third world problem is evident.
There is a need for holistic approach to the housing problem, an approach based
on the co-operation of all the players in the housing field. Such a strategy can be
negotiated at a representative forum such as the National Housing Forum. This can
ensure the participation of communities, the government, financial institutions,
private sector developers and the representatives of the mass based organisations.